Phillips 66: Lake Charles Refinery

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Conoco and Phillips 66 announced on November 18, 2001 that their boards of directors had unanimously approved a definitive agreement for a "merger of equals". The merged company, ConocoPhillips, became the third-largest integrated U.S. energy company based on market capitalization and oil and gas reserves and production. On November 11, 2011 ConocoPhillips announced that Phillips 66 would be the name of a new independent oil and gasoline refining and marketing firm, created as ConocoPhillips split into two companies. ConocoPhillips kept the current name of the company and concentrated on oil exploration and production side while Phillips 66 included refining, marketing, midstream, and chemical portions of the company. Photo: Hugh Pickens all rights reserved.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations


Contents

Master Index of Articles about Phillips 66

The 587 foot tall Mammoet PTC 140 crane, seen here from North First Street, towers over the Refinery Complex in Ponca City. The supercrane was used to move two new 232 ton coker reactor units within the refinery on September 29, 2013. Phillips was willing to invest $70 million in the two new coker reactor units because the Ponca City Refinery is one of the best run, safest, and most profitable of Phillips' fifteen worldwide refineries and Garland wants the refinery in Ponca City to continue to run smoothly and profitably. This photograph of the supercrane in Ponca City was taken from almost two miles away from the crane. Photo: Hugh Pickens All Rights Reserved.
Hugh Pickens, an analyst who closely follows Phillips 66, speaks with Phillips CEO Greg Garland (right) about the disposition of the North Tower, South Tower, and Research West at Phillips' Ponca City Refinery after Garland's speech to the Bartlesville Chamber of Commerce on August 13, 2014.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations


Lake Charles Refinery

The Lake Charles Refinery, located in Westlake, La., has a crude oil processing capacity of 239 MBD and processes mainly heavy, high-sulfur crude oil, as well as low-sulfur and acidic crude oil. The refinery receives domestic Gulf Coast and foreign crude oil. The Lake Charles Refinery produces a high percentage of transportation fuels, such as gasoline and jet fuel, along with home heating oil. The majority of its refined products are distributed by truck, railcar, barge or major common-carrier pipelines in the southeastern and eastern United States. In addition, refined products can be sold into export markets through the refinery’s marine terminal. The facilities include crude distillation, fluid catalytic cracker, hydrocracker, delayed coker and hydrodesulfurization units that enable it to produce low-sulfur gasoline and heating oil. The refinery facilities also include a specialty coker and calciner, which produce graphite petroleum coke for the steel industry. Through the Excel Paralubes joint venture, the refinery produces base oils for lubricants.[1] Lake Charles Refinery Photo by: Cory O'Quinn Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic

Description of Lake Charles Refinery

The Lake Charles Refinery, located in Westlake, La., has a crude oil processing capacity of 239 MBD and processes mainly heavy, high-sulfur crude oil, as well as low-sulfur and acidic crude oil. The refinery receives domestic Gulf Coast and foreign crude oil. The Lake Charles Refinery produces a high percentage of transportation fuels, such as gasoline and jet fuel, along with home heating oil. The majority of its refined products are distributed by truck, railcar, barge or major common-carrier pipelines in the southeastern and eastern United States. In addition, refined products can be sold into export markets through the refinery’s marine terminal. The facilities include crude distillation, fluid catalytic cracker, hydrocracker, delayed coker and hydrodesulfurization units that enable it to produce low-sulfur gasoline and heating oil. The refinery facilities also include a specialty coker and calciner, which produce graphite petroleum coke for the steel industry. Through the Excel Paralubes joint venture, the refinery produces base oils for lubricants.[2]

News and Views of Lake Charles Refinery

September 1, 2017: Phillips 66 Lake Charles Refinery Stays Open After Harvey by Tapping Into US Strategic Petroleum Reserves

The Houston Chronicle reported on August 31, 2017 that Phillips 66 says their Lake Charles Refinery is still running, and that Phillips 66 is taking 500,000 barrels of oil from the Strategic Petroleum Reserve's West Hackberry site that's just south of Lake Charles in Louisiana to keep its crude supplies going while many of the pipelines from Texas are shuttered. "The SPR release will help ensure that we can maximize our refined product supply in order to provide reliable energy during a difficult time that includes supply and logistics challenges following Hurricane Harvey," Phillips 66 said. More than 20 percent of the nation's oil refining capacity is currently offline because of Harvey with Texas outages from Corpus Christi to Houston to Port Arthur. That includes Phillips 66's Sweeny refining campus and Citgo's Corpus Christi refinery.[3]

Platts reported on September 1, 2017 that Phillips 66's Lake Charles Refinery is no longer cut off from tanker deliveries now that the Calcasieu Ship Channel and Lake Charles port have reopened, eliminating the need for further SPR loans. Phillips 66 spokesman Dennis Nuss said the refinery decided it no longer needed to borrow the additional 300,000 barrels of sour crude allocated by DOE. "As certain things open back up, then that would obviously help our supply and we wouldn't need it all," Nuss said. The loaned government crude was already flowing by pipeline from the SPR's West Hackberry cavern to the nearby refinery Thursday. "That's happening pretty quickly. It's in progress," Nuss said.[4]

April 28, 2017: Phillips 66 Completed Major Turnaround at Lake Charles Refinery

Greg Garland told analysts during the quarterly earnings conference call on April 28, 2017 pursuing high-return quick-payout projects in refining. "At the Billings Refinery, we're increasing heavy crude processing capability to 100%. This project is expected to be finished later this quarter. At Bayway and Wood River Refineries, we're modernizing SCC units to increase Phillips 66 is clean product yield. Both of these projects are expected to complete in the first half of 2018." Garland added that during the quarter, Phillips 66 had major turnarounds at the Ferndale, Bayway, Lake Charles and Wood River refineries. "So during the quarter, we successfully completed several major turnarounds in Refining and Chemicals. This represents our highest level of turnaround activity in a quarter since the formation of our company."[5]

January 17, 2017: Environmental Groups Gear Up for Second Hearing Against Phillips 66 Funded Bayou Bridge Pipeline

400 Come Out to Protest Phillips 66 Funded Bayou Bridge Pipeline. “This is like 50 times the amount of people we have at most of these meetings,” said Scott Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. Now Louisiana environmental groups are gearing up for a second hearing on February 8, 2017. "I expect we will have a bigger turnout, because people are fired up," said Anne Rolfes, director of the Louisiana Bucket Brigade environmental group. "... This opposition is really unprecedented." Photo: Desmogblog

The Advocate reported on January 17, 2017 that Louisiana environmental groups are gearing up for round two in a battle against the proposed 163-mile Bayou Bridge Pipeline, funded in part by Phillips 66, that they say they fear will foul the state's wetlands and water. A public hearing last week in Baton Rouge for a required U.S. Army Corps of Engineers permit drew more than 400 people, but activists expect a bigger turnout on February 8, 2017, said Anne Rolfes, "because people are fired up." "... This opposition is really unprecedented."

The subject of next month's hearing is the state Department of Natural Resources permit needed for portions of the pipeline that would pass through state-designated Coastal Zones in St. James and Assumption parishes, said DNR Communications Director Patrick Courreges. DNR began reviewing the permit early last year and initially closed the public comment period in May, but Courreges said the agency decided to hold a public hearing based on the increasing amount of attention the project has received in recent months. "When this project was originally being looked at, there wasn't that much interest," he said. Rolfes said the pipeline company can expect continued protests to block the project, even if it receives the required approvals from regulators who she accused of generally doing "big oil's bidding." "They will not lay this pipeline," she vowed.[6]

January 15, 2017: 400 Come Out to Protest Phillips 66 Funded Bayou Bridge Pipeline

400 Come Out to Protest Phillips 66 Funded Bayou Bridge Pipeline. “This is like 50 times the amount of people we have at most of these meetings,” said Scott Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. The project, if approved, will run though 11 parishes and cross around 600 acres of wetlands and 700 bodies of water, including wells that reportedly provide drinking water for some 300,000 families. Graphic: Phillips 66 Investor Presentation, September 2015

The Guardian reported on January 15, 2017 that Scott Eustis, a coastal wetland specialist with the Gulf Restoration Network, was surprised to be joined by more than 400 others when he attended a public hearing in Baton Rouge about the Bayou Bridge Pipeline, a pipeline extension partially funded by Phillips 66 that would run directly through the Atchafalaya Basin, the world’s largest natural swamp. “This is like 50 times the amount of people we have at most of these meetings,” said Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. The Bayou Bridge Pipeline, if approved, would carry 480,000 barrels of oil per day a final 162 miles across the state to refineries and ports, through eight watersheds and long stretches of fragile wetlands.

At the public hearing in Baton Rouge on Thursday, the first speaker, Cory Farber, project manager of the Bayou Bridge pipeline, said it was expected to create 2,500 temporary jobs. When Farber then said the project would produce 12 permanent jobs, the crowd laughed heartily. “Those who have airboat companies and equipment companies that specialize in putting in equipment, they’re not opposed to pipelines because of the short-term jobs,” said Jody Meche, president of the state Crawfish Producers’ Association, one of dozens who spoke at the hearing. “But once that pipe is in there, the jobs are gone.”

Debate was fierce. Pro-pipeline speakers – oil industry reps, state representatives, a retired Louisiana State University professor – pointed out that many pipelines already run through the Atchafalaya Basin and said pipelines were in general the safest way to transport oil – in the case of the Bayou Bridge pipeline, 280,000 barrels per day of crude to the Gulf coast region, with the potential for 480,000. Where most in attendance worried about potential oil spills and their effect on drinking water, Meche was more concerned with ways existing pipelines have, he said, “crippled” the fishing industry. “They excavated the trench that they put the pipe in and then [they didn’t clean up] and it leaves a dam behind that blocks the water flow,” he said on the microphone, “until there’s not enough oxygen in the water for the crawfish, the fish, or anything.”

Native Americans dotted the crowd, many of them fresh from Standing Rock. “The Native Americans in North Dakota get a lot of credit for showing people their power,” Eustis said. Lifelong Iberia Parish resident Andrea Kilchrist, 71, described the violence she had witnessed at Standing Rock: peaceful protesters battered with sonic grenades, tear gas, mace, and cannons. “If you think this company is not going to do the same thing here — it’s going to do the same thing here,” she warned the room. “I hate pain. I’m afraid of pain and broken bones,” she continued, her voice shaking. “But on that first day, if y’all give that permit, I will be sitting in front of a bulldozer.”

As activists see it, Louisiana residents are starting to really care about environmental issues and, more importantly, to make themselves heard. “A lot of times we don’t get this opportunity to speak up,” said Eustis, still admiring the surprisingly large crowd. “[These oil companies] want to just roll over us. “But after Katrina, and the BP spill, and the Baton Rouge flood last year – 100,000 people displaced from their homes because of climate change – I guess we’re finally just sick of this.”[7][8]

January 12, 2017: Showdown Looms Over Phillips 66 Funded Bayou Bridge Pipeline

The Greater Baton Rouge Business Report reported on January 12, 2017 that the $750 million Bayou Bridge Pipeline project being jointly pursued by subsidiaries of Phillips 66, Sunoco Logistics and Energy Transfer Partners, will face off against environmentalists at a public hearing on January 12, 2017 over the proposed 162-mile Bayou Bridge pipeline, which, if approved, will run from Lake Charles through the Atchafalaya Basin to St. James Parish. Advocates of the project are expected to argue that pipelines are the safest, most environmentally friendly and cost effective way to transport oil, noting also that the proposed pipeline will join an existing network of pipelines crisscrossing the state. “This is not the first pipeline that will run through the Atchafalaya,” says Tommy Foltz, executive vice president of the Consumer Energy Alliance.

But environmentalists are expected to take issue with the claim that pipelines are safe. Anne Rolfes with the Louisiana Bucket Brigade, who will be among those attending tonight’s hearing, notes that Louisiana had 144 pipeline accidents in 2016. “Our pipelines are falling apart,” Rolfes says. “They are leaking. They have holes in them. They are rusty and corroded. Our state should be forcing industry to repair the current pipelines rather than permit a new one.” The state should also be exploring alternative fuel sources like solar and wind energy, which represent the economic development opportunities of the future, Rolfes says. “One of the fastest growing sectors of job growth is in renewable energy and we’re dealing with these guys who are stuck thinking about fossil fuels,” she says.[9]

August 24, 2016: Phillips 66 Shuts Gasoline-Producing Unit at Lake Charles Refinery

Reuters reported on August 24, 2016 that Phillips 66 shut a gasoline-making reformer unit at Lake Charles Refinery earlier this month, and advanced planned work on the unit, said two sources familiar with the work. The unit is slated to return to return to service in mid-September.[10]

August 15, 2016: No Injuries in Fire at Phillips 66's Lake Charles Refinery

No Injuries in Fire at Phillips 66's Lake Charles Refinery No injuries have been reported in a fire that started in a processing unit at Phillips 66's Lake Charles Refinery. The fire started when a heater tube failed as a hydrogen unit was being shut down at the plant, according to sources familiar with operations. As a safety precaution, both Phillips 66 employees and contract workers were evacuated from the area, but allowed to return within the hour. Photo: KPLC

Reuters reported on August 15, 2016 that no injuries have been reported in a fire that started in a processing unit at Phillips 66's Lake Charles Refinery. The fire started when a heater tube failed as a hydrogen unit was being shut down at the plant, according to sources familiar with operations. A Phillips 66 representative did not immediately comment.[11] As a safety precaution, both Phillips 66 employees and contract workers were evacuated from the area, but allowed to return within the hour.

Calcasieu Emergency Director Dick Gremillion arrived at the scene soon after it started. "They were bringing a unit down and a fire occurred," Gremillion said. "It was quickly extinguished. It did make a lot of black smoke. A lot of people were concerned about it but there is no offsite impact. The workers were brought - this is a normal safety routine that they do - workers were brought out so they could do an accountability on them, make sure they had everyone accounted for. And they completed that and they've all gone back into the plant now." Westlake Police Chief Chris Wilrye says at no time were nearby residents in danger. "Our concern is for our citizens of the community of Westlake and to make sure there was no impact to the community and there was no evacuation that needed to be taken place outside of Phillips 66 property," he said. "From speaking with the people here at Phillips 66 there's no danger to the community."[12]

June 25, 2016: Lake Charles Refinery Celebrates 75 Years of Operation

American Press reported on June 25, 2016 that Phillips 66's Lake Charles Refinery recently celebrated its 75th anniversary in a ceremony that lauded employees, contractors and community stakeholders. The refinery officially began operating in 1941 as the Continental Oil Co to supply jet fuel during World War II. The $4.5 million project was run by 100 employees and had a crude oil capacity of 7,500 barrels per day. Between 1960 and 2002, the company changed its name to Conoco, was acquired by DuPont, became its own company again, and merged to form ConocoPhillips. In 2012, the company split and Phillips 66 began operating as its own refining and marketing business. Today, the refinery has a crude oil output of 249,000 barrels per day and 770 employees. “The names may have changed over the years, but our plans to operate safely with honor and commitment remain,” said Refinery Manager Rich Harbinson.

“ConocoPhillips has been a good neighbor to the city of Westlake, no doubt. They’re always giving,” said Westlake Mayor Bob Hardy worked at the refinery for years before going into local politics. Sowela Technical Community College Chancellor Neil Aspinwall said the company has invested heavily in Sowela by providing internships for students, equipment for Sowela structural programs, and over $2 million toward the construction of a 12,000-square-foot process technology building. “Phillips 66 is a great example of what we can accomplish when industry takes a role in the educational process and the preparation of the workforce,” Aspinwall said.[13]

According to local Ponca City historian Hugh Pickens, in the 1960s the Lake Charles Refinery was known as the sister refinery to Conoco's Ponca City Refinery. "It was very common for employees in Ponca City to be transferred to Lake Charles and vice versa." Pickens noted that the Ponca Refinery will be celebrating an anniversary of its own in just a few years. "In 1918 the Ponca Refinery, originally called the Marland Refinery, will be celebrating one hundred years of operation."

April 21, 2016: Commercial Operations Begin on Bayou Bridge Pipeline from Texas to Lake Charles Refinery

Bayou Bridge Pipeline, LLC, a joint venture between Phillips Partners L.P., Energy Transfer Partners, L.P., and Sunoco Logistics Partners L.P., announced on Thursday the first leg of its Bayou Bridge crude oil pipeline commenced commercial operations from Nederland, Texas, to Lake Charles, Louisiana, where the company has agreed to connect to Phillips Partners’ Clifton Ridge terminal and Citgo’s 427,800 b/d Lake Charles refinery. In addition, Bayou Bridge completed a successful binding open season to expand the system with a 24-inch extension segment from Lake Charles to St. James, Louisiana oil hub with connections to Plains Marketing, L.P.’s and NuStar Energy L.P.’s crude oil terminals. The second segment remains on schedule to start up in the second half of 2017.[14]

April 2, 2016: Phillips Reports Emissions Due to Compressor Upset at Lake Charles Refinery

Phillips reported a release of sulfur dioxide due to a wet gas compressor upset at its Lake Charles, Louisiana refinery on April 2, according to a filing with the National Response Center. [15]

October 26, 2015: Phillips Says Lake Charles Refinery Returning to Normal Operations after Power Dip

Phillips on Tuesday said power was restored at its Lake Charles, Louisiana refinery after a brief power loss on Monday. [16]

October 26, 2015: Construction Begins For New Hydrotreater at Lake Charles Refinery for Lower Sulfur Content in Gasoline

The Midland Reporter-Telegraph reported on October 26, 2015 that construction recently began for a new hydrotreater at the Lake Charles Refinery to meet federal Tier 3 standards for lower sulfur content in gasoline for the beginning of 2017. Phillips 66 also is considering building a new hydrocracker or other potential upgrades in order to produce road-grade diesel fuels that would be more marketable in the U.S. The Lake Charles Refinery currently produces lots of diesel, but it is high-sulfur diesel that must be sold internationally or in the Northeast as home heating oil, said Reinery Manager Steve Geiger. Phillips 66 has resisted the expansion thus far because the demand from foreign markets remains strong, Geiger said. “We’re going to spend money where we get the best return,” Geiger said.[17]

November 1, 2015: Phillips Reports Emissions at Westlake Refinery

Phillips reported hydrogen was released from a flare stack at its Westlake, Louisiana refinery due to a compressor that was shut.[18]

October 26, 2015: Construction Continues on Bayou Bridge Pipeline to Lake Charles Refinery

The Midland Reporter-Telegraph reported on October 26, 2015 that construction is ongoing on Phillips 66' Bayou Bridge pipeline to pump crude oil from terminals in southeast Texas directly to Lake Charles. The pipeline, which is scheduled to be completed in the first quarter of 2016, will essentially connect Phillips 66' expanding Beaumont Terminal storage hub with the Lake Charles Refinery. The pipeline will connect to systems from the Texas’ Permian Basin, Eagle Ford Shale, East Texas, the Texas Panhandle and southern Oklahoma. A second phase of the Bayou Bridge will connect Lake Charles to the market hub in St. James, Louisiana, which is roughly between Baton Rouge and New Orleans.[19]

October 21, 2015: Phillips Considers Hydrocracker at Lake Charles Refinery to Produce Ultra-Low sulfur Diesel

Houston Business Journal reported on October 21, 2015 that Phillips 66 is stacking the deck at their Lake Charles Refinery to take advantage of what the company sees as a strong future for diesel products. "We continue to look into opportunities to get into fuel-grade diesel," said Steve Geiger, general manager of the refinery in Lake Charles, known in the company as the Lake Charles Refinery. According to Geiger the Lake Charles Refinery is already stacked to maximize diesel production, but not the fuel-grade diesel that drivers of light-duty vehicles are most familiar with. Phillips 66's Lake Charles complex currently only produces diesel products with 2,000 ppm of sulfur, also considered "high-sulfur" diesel, which is used by only certain non-road, locomotive and marine vessels. However, diesel fuels used in light-duty vehicles are expected to grow in market share by significant strides in the coming decades and Phillips 66 is actively looking to produce fuel-grade diesel at Lake Charles.[20]

According to Geiger Phillips 66 is considering adding a hydrocracker to produce ultra-low sulfur diesel at its Lake Charles Refinery. "We can't make road grade diesel," Geiger said. "We're looking at several different options: hydrocracking, hydrotreating, a revamp." Additionally, the refinery plans to replace the four drums on the fuels Coker in 2017. Geiger declined to say when the work was scheduled and when it is due to take place on the year. The drums have reached the end of their operational life.[21]

October 21, 2015: Phillips Considers Adding Hydrocracker at Lake Charles Refinery

Phillips is considering adding a hydrocracker to produce ultra-low sulfur diesel (ULSD) at its Lake Charles, Louisiana refinery, the plant manager said on Tuesday. The refinery currently does not have the capability to produce ULSD. The refinery is also laying the foundation for a new fuels hydrotreater to enable it to meet Tier III gasoline standards. Additionally, the refinery plans to replace four coker drums in 2017.[22]

August 27, 2015: Construction Starts on Bayou Bridge for Pipeline to Lake Charles Refinery

Bakken.com reported on August 27, 2015 that construction has begun on the Bayou Bridge, a new pipeline that will carry crude oil from south Texas to Lake Charles, Louisiana in a joint venture between Phillips 66, Energy Transfer Partners and Sunoco Logistic Partners. The cost of the project has not been disclosed, but Phillips 66 claims 40 percent interest in the project, Energy Transfer Partners holds 30 percent and Sunoco will hold 30 percent as well as the system’s operations. “The Bayou Bridge pipeline, combined with the storage and logistics capabilities of our Beaumont Terminal, provides enhanced opportunities to deliver North American heavy and light crudes into the Louisiana market that is heavily dependent today on marine and rail delivery of crude oil,” said Greg Garland, chairman and CEO of Phillips 66 in a prepared statement.[23]

July 31, 2015: Phillips Restarting Units at Lake Charles Refinery after Power Loss

Phillips said its Lake Charles refinery in Westlake, Louisiana, experienced multiple unspecified unit upsets due to a partial power loss on Friday afternoon. The company said power was in the process of being restored and the affected units brought back on line. Industry intelligence firm Genscape earlier reported the shutdown of a crude distillation unit, the smallest of the three at the plant, and a vacuum distillation unit at the refinery according to reports from Reuters on July 31, 2015.[24]

July 31, 2015: Phillips to Build Bayou Bridge Pipeline to Deliver Crude Oil from Nederland, Texas to Lake Charles Refinery

Businesswire reported on July 31, 2015 that Phillips 66 announced it has formed a joint venture with Energy Transfer and Sunoco Logistics to build the Bayou Bridge pipeline that will deliver crude oil from Phillips 66's and Sunoco Logistics' terminals in Nederland, Texas to Lake Charles. The joint venture will also launch an expansion open season for service to the market hub in St. James, Louisiana in the third quarter of 2015. The first segment of the pipeline to Lake Charles is expected to begin commercial operations in 2016.[25]

Phillips 66 holds a 40 percent interest in the joint venture, while Energy Transfer and Sunoco each hold a 30 percent. However, Sunoco will serve as the operator of the system. “The Bayou Bridge pipeline, combined with the storage and logistics capabilities of our Beaumont Terminal, provides enhanced opportunities to deliver North American heavy and light crudes into the Louisiana market that is heavily dependent today on marine and rail delivery of crude oil,” said Greg Garland, chairman and CEO of Phillips 66 in a prepared statement. “The pipeline also complements other pipeline projects we have underway to deliver Bakken crude oil to the Gulf Coast." The pipeline will connect to systems from the Texas’ Permian Basin, Eagle Ford Shale, East Texas, the Texas Panhandle and southern Oklahoma, said Michael Hennigan, president and CEO of Sunoco Logistics. Construction has begun on the Nederland to Lake Charles segment of the pipeline, which will be 30 inches in diameter and is expected to begin commercial operations in the first quarter of 2016. The companies will launch the binding open season on the expansion to terminals and refineries in St. James, Louisiana in the third quarter of the year. That process will help determine the size of the pipeline to St. James, which has a projected start up in the second half of 2017.[26]

May 31, 2015: Phillips Reports Emissions at Lake Charles Refinery

Phillips reported emissions at Lake Charles Refinery according to a report from Reuters on June 1, 2015.[27]

May 15, 2015: Phillips Reports Emissions, Flaring at Lake Charles Refinery

Phillips reported emissions and falring at Lake Charles Refinery according to a report from Reuters on May 19, 2015.[28]

May 19, 2015: Phillips Says Don't Be Alarmed by Bright Green Water

KPLC reported on May 19, 2015 that residents driving on Sampson Street may notice some bright green water in the ditches near Phillips 66 but don't worry; the water is harmless and is being used for a "routine hydrostatic test" on one of its storage tanks. "The tank is thoroughly cleaned of product, filled with water and a non-hazardous biodegradable dye, similar to food coloring, is added," Carol Collins said in a news release. "The tank is then drained. The use of color water makes it easier to detect leaks and make repairs before the tank is put back in service." Collins reiterated that "there is no cause for concern."[29]

May 18, 2015: Phillips Continues Restarting Lake Charles Refinery after Brief Power Loss

Phillips continued restarting the Lake Charles Refinery after a brief power loss according to a report from Reuters on May 18, 2015.[30]

May 15, 2015: Phillips Bringing Units Online After Power Loss at Lake Charles Refinery

Reuters reported on May 15, 2015 that Phillips is in the process of bringing several units online after a partial power loss at Lake Chakes Refinery early monring on May 15, 2015 that caused an upset in several units. Spokesman Dennis Nuss says power has been restored and there were no injuries associated with the power loss.[31]

May 15, 2015: Phillips Brings Units Back Online after Power Loss at Lake Charles Refinery

Phillips brought units back online after a power loss at Lake Charles Refinery according to a report from Reuters on May 15, 2015.[32]

December 26, 2014: Phillips Gives $155,000 to Westlake Fire Department and Police

American Press reported on December 26, 2014 that Phillips 66 has given the Westlake police and fire departments $115,000 under the company’s Community Signature Initiative, which aids communities with emergency preparedness and safety efforts. “We had this in the works since September before the election,” said Steve Geiger, plant manager of Phillips 66’s Westlake refinery. “So we reached out to the police and fire departments and told them we had the opportunity to get a grant. So we basically collected the needs of the community and went back to our corporate office and said this is what we see as a benefit to the community.” Mayor Bob Hardey said the money will be split between the two departments. The Fire Department will get $60,000; the Police Department will get $55,000.[33]

November 24, 2014: Update: Phillips Says Unit Remains Shut at Westlake Refinery

Phillips said on Monday a unit remained shut following a fire on Sunday morning at its Lake Charles refinery in Westlake, Louisiana. Refinery operations have continued uninterrupted and there were no injuries due to the fire, which was put out by the plant’s in-house emergency response team, the company said. An investigation was underway into the incident, it added. The company reported a gasoline release due to a fire at the refinery, according to a filing with the U.S. National Response Center.[34]

November 23, 2014: Fire Extinguished at Lake Charles Refinery

KPLC reported on November 23, 2014 that a fire broke out in one of the units at the Phillips 66 Lake Charles Manufacturing Complex at 6 am on November 23, 2014. "The plant's in-house emergency response team was immediately called to the scene and extinguished the blaze," said Carol Collins, Public Relations Director for Phillips 66,. "There were no injuries and no impact to the community. As required, the refinery notified all appropriate local and state agencies." Westlake Police told KPLC the fire was out by 7:50 a.m. and a few roads near the refinery were blocked off and the fire was quickly put out. Collins said the cause of the fire is under investigation.[35]

October 28, 2014: Phillips Donates $100,000 to Lagrange High School in Lake Charles

KPLC TV reported on October 28, 2014 that Phillips donated $100,000 to LaGrange High to update the school's science labs. "It's very exciting to be in a lab here today," said Calcasieu Parish Superintendent Karl Bruchhaus. "Phillips 66 has been a great partner and has provided an opportunity for LaGrange High School to have a few things that no other high school that I'm familiar with has the benefit of."[36]

March 26, 2014: Phillips Pays $500,000 Fine for Clean Air Violations at Lake Charles Refinery and Four Other Refineries

CSP Daily News reported on March 26, 2014 that Phillips will pay a $500,000 penalty for violations of the Clean Air Act at the Lake Charles Refinery in Westlake, La., the Wood River Refinery in Roxana, Ill., the Alliance Refinery in Belle Chasse, La., the Sweeny Refinery in Old Ocean, Texas, the Borger Refinery in Borger, Texas, and several terminals across the country. Phillips also agreed to retire more than 21 billion sulfur credits that could have been used in the production of gasoline, which could potentially lead to significantly less pollution from vehicles. In a administrative settlement agreement, the EPA alleged that the company generated invalid sulfur credits between 2006 and 2012 and that Phillips failed to comply with recordkeeping, reporting, sampling and testing requirements at the five refineries. EPA discovered these violations during facility inspections and through a review of company records, which included the results of third-party company audits required by the Clean Air Act.[37]

January 7, 2014: Phillips Reports Unit Electric Issue at Lake Charles Refinery

Phillips reported an electrical problem leading to flaring at its Lake Charles refinery in Westlake, Louisiana, according to a notice filed with the National Response Center on January 7, 2014.[38]

November 18, 2013: Planned Maintenance Completed at Lake Charles Refinery

Reuters reported on November 18, 2013 that planned maintenance was completed at the Lake Charles Refinery. Phillips had previously reported that planned maintenance was on at the refinery as of September 12, 2013.[39]

October 30, 2013: Garland Says Decrease in Heavy Crude Is Due to Downtime at Sweeny and Lake Charles Refineries

Garland told analysts at the third quarter earnings conference on October 30, 2013 that the decrease in other heavy crude from 27% to 24% is attributed mainly to the downtime at Phillips' Lake Charles and Sweeney refineries this year.[40]

September 4, 2013: Phillips Lake Charles Refinery Operating Normally After Storms Shut Units

Phillips said operations were back to normal at its Lake Charles refinery in Westlake, Louisiana. The company had reported severe weather had led to a shutdown of some units at the refinery although no damage was reported.[41]

September 3, 2013: Storm Shuts Units at Lake Charles Refinery

Phillips reported a storm with lightning shut down some units at its Lake Charles refinery in Westlake, Louisiana, according to a filing with the U.S. National Response Center. There was a release of sulfur dioxide and instruments will be put back online after securing the release, the filing said.[42]

August 6, 2013: Phillips Conducts Evacuation Drills at Lake Charles Refinery

KPLC TV reported on Augusut 6, 2013 that Phillips planned drill exercises over multiple days to cover all shifts and that residents should not be alarmed by horns. "Neighbors and passersby may hear a series of horn blasts and see employees gathering in the parking lot, however, they should not be alarmed as this is part of the exercise. The horns will sound to signal the start of the evacuation and then again when the all clear is issued," the release states. The Occupational Safety and Health Administration (OSHA) requires all VPP Star sites to conduct an annual evacuation drill.[43]

July 31, 2013: Phillips to Process More Light Oil at Lake Charles Refinery

Greg Garland told analysts at Phillips 2nd Quarters earnings conference on July 31, 2013 that Phillips has opportunities at the Sweeny Refinery, Alliance Refinery, and Lake Charles Refinery to make some modifications and process more light oil through these facilities and with minimal capital investment. "We are looking for 40% return type projects on the refining side. And so we’re looking for quick hit, fast payout projects. We have some underutilized equipment that we can kind of tie together and use that all and so we've got some projects around that that we are executing." Garland added that the projects are already underway. "We actually do things like tie-ins and turnarounds and some other things. So, it kind of depends on the schedule and things that are available, but those are our plans that we have in place to make those margin in some of our refining system already."[44]

April 4, 2013: Planned Maintenance Completed at Lake Charles Refinery

Fox Business reported on April 4, 2013 that planned maintenance was recently concluded, on schedule, at its Lake Charles refinery. Phillips did not specify what unit, or units, were involved in this round of maintenance.[45]

February 27, 2013: Phillips 66 Process Technology Building Opens at SOWELA Technical Community College

KPLC reported on February 27, 2013 that SOWELA Technical Community College held a ribbon cutting ceremony on February 27, 2013 for the new Phillips 66 Process Technology Center. Phillips - then ConocoPhillips - donated $2 million to the school to construct a new industrial technology building after the campus sustained extensive damage from Hurricane Rita. "This program is important to industry in the area because SOWELA provides us with well trained operators," said Phillips 66 refinery manager Willie Tempton Jr.[46]

January 30, 2013: Garland Says Phillips Has Completely Backed Out US Light Sweet Crude from Lake Charles Refinery

Greg Garland told analysts at the 4th quarter earnings conference on January 30, 2013 that Phillips has completely backed out imports of U.S. light sweet crude in the Gulf Coast refineries including Lake Charles .[47]

October 24, 2012: Louisiana Supreme Court Asked to Review Phillips 66 I-10 Bridge Case

KPLC reported on October 24, 2012 that the Louisiana Department of Transportation and Development (DOTD ) hopes the Louisiana Supreme Court will reverse the decision by Judge Clayton Davis to postpone the trial against Phillips 66 on a lawsuit for spilling an estimated 1.7 million pounds of ethylene dichloride (EDC). Judge Clayton Davis continued the lawsuit until a three-year environmental impact study is done. DOTD officials have said when a new bridge is built, they must avoid hitting the underground plume of chemical contamination to avoid spreading it and estimates the state's damages from the spill are $235-million, including the increased cost of a bridge with spans long enough to bypass the spill. "DOTD would like to move forward with the case and get a trial date," said DOTD Attorney Patrick McIntire. "Phillips 66 believes the trial court's [original] ruling was well-reasoned and fair," said a spokesman for Phillips 66.[48]

August 27, 2012: Phillips Keeping a Close Eye on Hurricane Isaac but Lake Charles Refinery Still Operating

Fox News reported on August 27, 2012 that Phillips 66's Lake Charles refinery in Westlake, La. was still running but that the company was keeping a close eye on the progress of Tropical Storm Isaac. Tropical Storm Isaac blew into the eastern Gulf of Mexico August 27, 2012 and is expected to strengthen into a hurricane before hitting parts of the Louisiana coastline by August 29, 2012. Phillips' Alliance refinery in Belle Chasse was in the process of suspending operations and would be completely shut down by the evening of August 27, 2012 ahead of Tropical Storm Isaac.[49]

July 14, 2012: Naphtha Spill at Lake Charles Refinery

The National Response Center reported that there was a spill of Naphtha from Phillips 66’s Westlake, Louisiana refinery due to a flange leak.[50]

June 26, 2012: Court Hearing held on I-10 Bridge contamination from Chemical Spill that Caused $235 million Damage twenty years ago

KPIC.TV reported on June 272, 2012 that there's been almost no progress on a new I-10 calcasieu river bridge because state highway officials say they need to avoid hitting the underground plume of chemical contamination from a chemical spill nearly twenty years ago for which Conoco Phillips and Sasol are responsible and the State Department of Transportation and Development estimates the state's damages from the spill are $235 million including the increased cost of a bridge with spans long enough to bypass the spill. They don't want to drive pilings through the plume for fear of spreading the contamination. The state has filed suit to get that added cost and the jury trial is set for October. "There's contamination in the ground and the groundwater where we need to build the bridge. It's going to cost extra to stay out of the contamination when the bridge is built and that's the damages that the state is requesting that be awarded in the lawsuit. The state would like to stay out of the contamination and span the contamination and that's what drives up the extra cost," says Attorney Patrick McIntire representing the state of Lousiana.[51]

Conoco Phillips and Sasol say it's uncertain what kind of bridge should be built--and that the trial on that part of damages should be delayed until an environmental impact study which will take at least three years. "We are a valued member of this community, and are committed to being a part of the solution for this project in a manner that is consistent with the on-going federal environmental review process. The resolution of the motion presented today will not delay this project in any way," says Phillips 66 in an official statement.[52]

June 17, 2012: Units at Lake Charles Refinery Restarted after Partial Power Outage

Reuters reported on June 17, 2012 that Phillips 66's Lake Charles Refinery was restarting units on June 17, 2012 after a partial power outage and the refinery released particulate matter while flaring following the power outage according to a notice filed with the U.S. National Response Center.[53] BusinessWeek reported on June 18, 2012 that Gulf Coast gasoline strengthened against New York futures as Phillips 66 resumed routine operations at the Lake Charles refinery after the power loss.[54]

References

  1. ConocoPhillips. "US Refining as of March 31, 2011"
  2. ConocoPhillips. "US Refining as of March 31, 2011"
  3. Houston Chronicle. "Lake Charles refineries mostly staying open" Augusut 31, 2017.
  4. Platts. "Phillips 66 reduces US SPR loan to 700,000 barrels as constraints ease" September 1, 2017.
  5. Yahoo Finance. "Q1 2017 Phillips 66 Earnings Call" April 28, 2017.
  6. The Advocate. "Round two looms in fight over 163-mile oil pipeline through Atchafalaya Basin" by Richard Burgess. January 17, 2017.
  7. The Guardian. "Protests escalate over Louisiana pipeline by company behind Dakota Access" by Michael Patrick Welch. January 15, 2017.
  8. Think Progress. "The water protectors defend the bayou" by Aviva Shen. January 14, 2017.
  9. Greater Baton Rouge Business Report. "Showdown looms tonight over proposed Bayou Bridge pipeline" by Stephanie Riegel. January 12, 2017.
  10. Reuters. "Phillips 66 shuts gasoline-producing unit at Westlake refinery: sources" August 24, 2016.
  11. Reuters. "Fire at Phillips 66 Louisiana refinery out, no injuries: official" August 15, 2016.
  12. KPLC. "Phillips 66: No injuries reported in fire" by Johnathan Manning. August 15, 2016.
  13. American Press. "Phillips 66 refinery celebrates 75 years of operation" by Justin Phillips. June 25, 2016.
  14. Department of Energy. "Energy Assurance Daily" April 22, 2016
  15. Department of Energy. "Energy Assurance Daily" April 7, 2016
  16. Department of Energy. "Energy Assurance Daily" October 27, 2015
  17. Midland Reporter-Telegraph. "Phillips 66 grows in Texas; Louisiana to feed refineries" by Jordan Blum. October 26, 2015.
  18. Department of Energy. "Energy Assurance Daily" November 4, 2015
  19. Midland Reporter-Telegraph. "Phillips 66 grows in Texas; Louisiana to feed refineries" by Jordan Blum. October 26, 2015.
  20. Houston Business Journal. "Phillips 66 bets on diesel" by Suzanne Edwards. October 21, 2015.
  21. Reuters. "Phillips 66 eyes adding hydrocracker at Lake Charles refinery" October 20, 2015.
  22. Department of Energy. "Energy Assurance Daily" October 21, 2015
  23. Bakken.com "Bayou Bridge construction starts" August 27, 2015.
  24. Department of Energy. "Energy Assurance Daily" August 3, 2015
  25. Businesswire. "Phillips 66 Reports Second-Quarter Earnings of $1.0 Billion or $1.84 Per Share" July 31, 2015.
  26. FuelFix. "Phillips 66 takes lead on Texas-to-Louisiana pipeline joint venture" by Jordan Blum. July 30, 2015.
  27. Department of Energy. "Energy Assurance Daily" June 2, 2015
  28. Department of Energy. "Energy Assurance Daily" May 19, 2015
  29. KPLC. "Phillips 66: Don't be alarmed by bright green water" by Laura Heller. May 19, 2015.
  30. Department of Energy. "Energy Assurance Daily" May 15, 2015
  31. Reuters. "Phillips 66 brining units online after power loss at Lake Chalres reingery" May 15, 2015.
  32. Department of Energy. "Energy Assurance Daily" May 15, 2015
  33. American Press. "Phillips 66 gives Westlake $115k police, fire grant" by Frank DeCesare. December 20, 2014.
  34. United Steelworkers. US Department of Energy. "Energy Assurance Daily" November 25, 2014
  35. KPLC. "No chemicals released, no injuries reported in fire at Phillips 66" November 23, 2014.
  36. KPLC Tv. "LaGrange receives $100,000 grant from Phillips 66" October 28, 2014.
  37. CSP Daily News. "Phillips 66 to Pay $500,000 Over Clean Air Act Violations" March 26, 2014.
  38. United Steelworkers. Refinery Events January 1 – January 9, 2014
  39. Reuters. "Phillips 66 says work completed at Lake Charles refinery in Louisiana: November 18, 2013.
  40. Seeking Alpha. "Phillips 66's CEO Discusses Q3 2013 Results - Earnings Call Transcript" October 30, 2013.
  41. United Steelworkers. Refinery Events - (Aug. 30, 2013 through Sept. 5, 2013)
  42. United Steelworkers. Refinery Events - (Aug. 30, 2013 through Sept. 5, 2013)
  43. KPLC TV "Phillips 66 to conduct drill exercise this week" by Elona Weston. August 6, 2013.
  44. Seeking Alpha. "Phillips 66's CEO Discusses Q2 2013 Results - Earnings Call Transcript" July 31, 2013.
  45. Fox Business. "Refinery Status: Leak, Fire at LyondellBasell -2-" April 4, 2013.
  46. KPLC. "Sowela Holds Ribbon Cutting For Phillips 66 Process Technology Building" February 27, 2013.
  47. Seeking Alpha. "Phillips 66's CEO Discusses Q4 2012 Results - Earnings Call Transcript" January 30, 2013.
  48. KPLC. "La. Supreme Court asked to review I-10 Bridge case" by Theresa Schmidt. October 24, 2012.
  49. Fox News. "Phillips 66: Belle Chasse, La., Refinery Closing Ahead of Isaac" August 27, 2012.
  50. United Steelworkers Weekly List of Refinery Events "July 13, 2012—July 19, 2012"
  51. KIPT TV. "Court hearing held on I-10 Bridge contamination" by Theresa Schmidt. June 26, 2012.
  52. KIPT TV. "Court hearing held on I-10 Bridge contamination" by Theresa Schmidt. June 26, 2012.
  53. Reuters. "Phillips Westlake refinery restarts after power loss -filing" June 17, 2012.
  54. BusinessWeek. "Gulf Gasoline Gains Amid Power Failure at Phillips 66 Refinery" by Paul Burkhardt. June 18, 2012.



Master Index of Articles about Phillips 66

The North Tower and the South Tower, part of Phillips 66's Refinery Complex in Ponca City, contain over 250,000 square feet of Class A office space that is essentially unused. Research West contains another 230,000 square feet of unused Class A office space. Photo: Hugh Pickens
Ponca: A Core Asset. Phillips CEO Greg Garland told members of the Bartlesville Chamber of Commerce on August 27, 2013 that the refinery at Ponca is a 'core asset' of Phillips 66. The refinery in Ponca City "is making very good money for us," Garland told his Bartlesville audience. Garland added that he expects gas demands in the U.S. to decline by 20 percent in the next 10 years, but that demand for refined products in South America and Africa will more than offset that decline.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


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