Phillips 66: Sweeny 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


Sweeny Refinery

The Sweeny Refinery, located in Old Ocean, Texas, 65 miles southwest of Houston, has a crude oil processing capacity of 247 MBD. It processes mainly heavy, high-sulfur crude oil, but also processes light, low-sulfur crude oil. The refinery facilities include fluid catalytic cracking, delayed coking, alkylation, a continuous regeneration reformer and hydrodesulfurization units. The refinery receives domestic and foreign crude oil, primarily through wholly and jointly owned terminals on the Gulf Coast, including a deepwater terminal at Freeport, Texas. It produces a high percentage of transportation fuels, such as gasoline, diesel fuel and jet fuel. Other products include petrochemical feedstocks, home heating oil and coke. The refinery operates nearby terminals and storage facilities in Freeport, Jones Creek and on the San Bernard River, along with pipelines that connect these facilities to the refinery. Refined products are distributed throughout the Midwest and southeastern United States by pipeline, barge and railcar. Photo by imelda Flicker Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

Description of Sweeny Refinery

The Sweeny Refinery, located in Old Ocean, Texas, 65 miles southwest of Houston, has a crude oil processing capacity of 247 MBD. It processes mainly heavy, high-sulfur crude oil, but also processes light, low-sulfur crude oil. The refinery facilities include fluid catalytic cracking, delayed coking, alkylation, a continuous regeneration reformer and hydrodesulfurization units. The refinery receives domestic and foreign crude oil, primarily through wholly and jointly owned terminals on the Gulf Coast, including a deepwater terminal at Freeport, Texas. It produces a high percentage of transportation fuels, such as gasoline, diesel fuel and jet fuel. Other products include petrochemical feedstocks, home heating oil and coke. The refinery operates nearby terminals and storage facilities in Freeport, Jones Creek and on the San Bernard River, along with pipelines that connect these facilities to the refinery. Refined products are distributed throughout the Midwest and southeastern United States by pipeline, barge and railcar. Merey Sweeny, L.P. (MSLP) is a limited partnership that owns a 70 MBD delayed coker and related facilities at the Sweeny Refinery that produce fuel-grade petroleum coke. Prior to August 2009, MSLP was owned 50/50 by ConocoPhillips and Petróleos de Venezuela, S.A. (PDVSA), Venezuela’s national oil company. Under agreements that govern relationships between the partners, certain defaults by PDVSA with respect to supply of crude oil to the Sweeny Refinery gave ConocoPhillips the right to acquire PDVSA’s 50 percent ownership interest in MSLP. In August 2009, ConocoPhillips exercised that right. PDVSA has initiated arbitration in the International Chamber of Commerce challenging ConocoPhillips’ actions, and the arbitration process is under way.[1]

News and Views on Sweeny Refinery

April 7, 2015: Phillips Schedules Up to Two Weeks of Unexpected Maintenance at Sweeny Refinery

Retuers reported on April 7, 2015 that Phillips 66 has scheduled up to two weeks of unexpected maintenance at its 247,000 bpd refinery in Sweeny, Texas. This will reduce local demand for Permian Basin crude that will now either be pumped to Cushing or shipped to Gulf Coast refiners.[2]

January 22, 2015: Phillips Christens Petrochemical Academy at Sweeny

The Facts reported on January 22, 2015 that competing with with other companies, such as Dow Chemical Co., BASF and Freeport LNG, to attract the younger workers in the Sweeny area can make it difficult to find new, younger employees, but with the Petrochemical Academy, but according to Sweeny Refinery manager Willie Tempton Phillips 66 is able to control its future by training the next generation right in its own backyard. “They’ve got the technology, the staff and people to provide the industry with an abundance of well-trained and capable potential employees,” said Tempton. The facility opened its doors to Sweeny High School students at the start of this school year in August. Sweeny ISD students can take dual-credit courses at Brazosport College while attending high school, Chevron Phillips Chemical Sweeny Complex Plant Manager Wayne McDowell said. Students who enroll in these classes will gain practical college-level skills, and do it before graduating high school. “We need everyone here and more to help us bring awareness to the young people that opportunities do exist in the petrochemical manufacturing industry,” McDowell said.[3]

December 8, 2014: Phillips 66 Files Permit to Build Condensate Splitter

Argus reported on December 8, 2014 that Phillips 66 has filed an initial construction permit for a simplified condensate splitter at Sweeny Refinery that would allow it to process condensate to break it down into naptha and other products.[4] The permit application filed earlier this month with the Texas Commission on Environmental Quality identifies the project as a "simplified condensate splitter unit" and is a step in the company's ongoing study of the project. The splitter, as well as an Eagle Ford crude and condensate pipeline and a second 110,000 bpd fractionator at the refinery site "are currently in the engineering design and permitting phase," spokesman Dennis Nuss said. Phillips 66 executives have said the company is evaluating the export of condensate, a super-light form of crude oil.[5]

September 5, 2014: Phillips Begins FCCU Overhaul at Sweeny Refinery

Reuters reported on September 3, 2014 that Phillips 66 began a planned overhaul on a gasoline-producing fluidic catalytic cracking unit at Sweeny Refinery, according to energy intelligence service Genscape. Phillips had filed notice with the Texas Commission on Environmental Quality that it would begin planned work on the 78,000 bpd FCCU as required every five years.[6]

September 3, 2014: Phillips Hardens Electrical Infrastructure at Sweeny to Prevent a Recurrence of 2013 Outages

Greg Garland told analysts at Barclays CEO energy-Power Conference on September 3, 2014 that Phillips wants to prevent a reccurence of the electrical problems that plagued Sweeny in the first and second quarters of 2013. "We took out our other equity owner, 50% owner of the 440 megawatt Cogen facility at Sweeny. when you think about the existing investment we have, the new investment going in at Sweeny, both from PSX and also CPChem, we want to make sure we harden that electrical infrastructure. You remember in the first quarter and second quarter of last year, we had some issues, mostly related to our third-party providers. We want to ensure that we've got that well in hand and we don't have that ever happen to us again and so that was part of the reason for that.[7]

FuelFix reported on July 31, 2013 that Phillips 66 underperformed in the second quarter as its earnings dropped 19 percent because of higher costs for oil and outages that shut down key facilities. The refinery at Sweeny had two power outages that were a major problem. “We had a second power outage in the second quarter and in my view that’s unacceptable,” Garland said. The refinery is powered both by an on-site generation facility and by a power company. The power company was the cause of the two outages. “To me, personally, the biggest disappointment in the quarter was having a second power outage at Sweeny,” Garland added.[8]

August 15, 2014: Phillips and Chevron Pledge $1,6000,000 to Fund Petrochemical Academy in Sweeny

Hydrocarbon Proecssing reported on August 15, 2014 that Phillips 66 and Chevron Phillips Chemical are making an initial combined contribution of $1.6 million to help fund the creation of a petrochemical academy with the Sweeny Independent School District as part of their continued commitment to education and workforce development initiatives in the communities where they operate. The $1.6 million combined contribution by Phillips 66 and Chevron Phillips Chemical will support the purchase of equipment, building renovations, and scholarships for juniors and seniors enrolled in Sweeny ISD and surrounding school systems. Subsequent contributions will be made in coming years to help cover ongoing maintenance and operation costs and additional equipment. We have significant growth plans for our operations in this region, so it’s exciting to know that students who enroll in classes at the academy will gain college-level skills before they even graduate high school,” said Willie Tempton, Refinery Manager at Phillips Sweeny Refinery. “That means a well-trained workforce for industry in our area and good paying jobs for young Texans looking for a career right here at home.”[9]

August 13, 2014: Phillips Breaks Ground on LPG Export Terminal at Freeport

Jordan Blum reported in the Houston Business Journal on August 13, 2014 that Phillips broke ground on its $1 billion liquefied petroleum gas export terminal — its first ever — in Freeport to sell propane, butane and more to international markets. The project, which is expected to be completed in mid-2016, will export 4.4 million barrels of fuel a month to countries in Europe and Asia. The terminal will get the fuel from its Sweeny complex in Old Ocean and its Gulf Coast Fractionators facility in Mont Belvieu. "We are investing, we are building and we are growing," Phillips 66 Chairman and CEO Greg Garland said at the groundbreaking. "The projects we're breaking ground on … total more than $3 billion of investment for our company, … and it's happening right here in our own backyard in the communities of Sweeny and Freeport." Freeport has advantages over operating out of the Houston Ship Channel because Freeport is 3 miles from deep water, compared to 50 miles for the channel says Jim Webster, Phillips 66’s general manager of midstream.[10]

July 16, 2014: Phillips Cuts Unit Rates Due to Power Blip at Sweeny Refinery

Phillips reported power to both flare gas recovery compressors was lost due an electrical failure causing the flare gas recovery system to shutdown. Power was quickly restored, and a safe and controlled restart of the flare gas recovery compressors was conducted. Units were operated at reduced rates during the outage in order to reduce the amount of flaring. [11]

July 10, 2014: Phillips to Accelerate Development of Sweeny Fractionator and Freeport Terminal

FueldFix reported on July 10, 2014 that Phillips will increase its 2014 capital budget by $1.2 billion for 2014 in order to fund its liquefied petroleum gas project as well as a recent acquisition. The increase will allow the company to put more cash towards the development of a new fractionator at its Sweeny refinery and a liquid petroleum gas export terminal in Freeport, among other projects. The fractionator is expected to come online in the third quarter of 2015, and the export terminal is expected to be operational in mid-2016. The fracionator will separate natural gas liquids into components including ethane, propane and butane. Some of those products will then be exported as liquefied petroleum gas from Freeport. The entire project is slated to cost $3 billion.[12]

July 4, 2014: Phillips 66 Reports FCCU Normal after Feed Cut at Sweeny Refinery

Phillips 66 reported a fluid catalytic cracking unit (FCCU) at its Sweeny refinery in Texas was brought back to normal operations after feed was stopped due to a pump malfunction, a filing with the Texas Commission on Environmental Quality showed. Feed was stopped to FCCU 3 due to the loss of a feed pump motor at an adjacent process unit, the filing said, adding that the feed rate was resumed following repairs on the pump. [13]

June 6, 2014: Phillips Reports FCCU Emissions at Sweeny Refinery

Phillips reported an air blower turbine shutdown was causing emissions from its coker and fluid catalytic cracking unit (FCCU) at its Sweeny refinery in Texas on Friday, according to a filing with state pollution regulators. Energy intelligence firm Genscape had reported a brief flaring was observed at the refinery on Thursday. [14]

May 28, 2014: International Tribunal Supports Phillips' Takeover of Coker at Sweeny Refinery

Fuelfix reported on May 28, 2014 that the International Chamber of Commerce’s Court of Arbitration has upheld Phillips 66’s right to exercise a call option in 2009 and assume Petroleos de Venezuela SA's (PDVSA) interest in Merey Sweeny LP. The partnership owns a 70,000-barrel- per-day delayed coker and related facilities at the refinery. “Certain defaults by PDVSA with respect to supply of crude oil to the Sweeny refinery triggered the right to acquire PDVSA’s 50 percent ownership interest,” says Phillips spokesman Rich Johnson. State-owned PDVSA initiated arbitration with the ICC, claiming the exercise of the call right was invalid. “Since there is not a lot of crude imported into the U.S. anymore, this decision hurts PDVSA on several fronts. First, the company loses the refinery and production, and secondly it loses the opportunity to bring crude into the refinery,” says Carl Larry.[15]

April 11, 2014: Phillips to Build Splitter at Sweeny Refinery to Process Condensates into Fuel Components that Can Be Exported

Reuters reported on April 11, 2014 that Phillips plans to build a condensate splitter at Sweeny refinery which will allow it to process condensates into fuel components that can be exported.[16]

March 26, 2014: Phillips Pays $500,000 Fine for Clean Air Violations at Sweeny 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 Sweeny Refinery in Old Ocean, Texas, the Alliance Refinery in Belle Chasse, La., the Wood River Refinery in Roxana, Ill., the Lake Charles Refinery in Westlake, La., 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.[17]

March 24, 2014: Phillips Reports Compressors Trip at Sweeny Refinery

Phillips reported two compressors tripped because of a low lube oil pressure shutdown at its Sweeny refinery in Texas, according to a filing with the Texas Commission on Environmental Quality. The refinery operators were working to get the compressors back online, the filing said.[18]

March 20, 2014: Phillips May Build Condensate Splitter at Sweeny Refinery to Separate Ultra-light Crude Oil into Unfinished Products

Dan Murtaugh reported at Businessweek on March 20, 2014 that Phillips is considering building a condensate splitter at its Sweeny refinery to separate ultra-light crude oil into unfinished products that could be exported overseas, sold to refineries or blenders, or provide feedstock to run more downstream units at full capacity. Sweeny, which is distilling about 255,000 barrels of crude a day, doesn’t produce enough unfinished or intermediate products to fill all of its secondary units such as fluid catalytic crackers, refinery General Manager Willie Tempton Jr. said. Products from a splitter could go into those units. Sweeny is relatively isolated, making it more difficult to obtain intermediate feedstocks from outside, said Chris Chandler, Phillips 66’s general manager of natural gas liquids.[19] Bloomberg reported on March 6, 2014 that British Petroleum had signed on to take at least 80 percent of the capacity of a new $360 million mini-refinery in Houston that will process crude just enough to escape restrictions on sales outside the country. “It’s a relatively inexpensive way around the export prohibition,” says Judith Dwarkin “You can lightly ruffle the hydrocarbons and they are considered processed and then they aren’t subject to the ban.” "The international buyers of these products will likely need to refine them further, so this is basically a veiled form of condensate exports,” said Leo Mariani.[20][21][22] According to Bloomberg, three additional plants have been proposed by other pipeline or trading companies, and refiners including Valero and Phillips said they may follow suit.[23]

March 20, 2014: Phillips Prepares Fractionator to Convert Mixed NGLs into Ethane, Propane, Butane And Natural Gasoline by 2015

Dan Murtaugh reported at Businessweek on March 20, 2014 that Phillips is expanding natural gas liquids and export capabilities at Sweeny Refinery by preparing the ground for Phillips' first wholly-owned fractionator, which by 2015 will be able to convert about 100,000 bpd of mixed NGLs into ethane, propane, butane and natural gasoline.[24]

March 4, 2014: Phillips 66 Reports Unit 35 Heater at Sweeny Refinery Back after Upset due to Cold Weather

Phillips 66 reported it brought back online a heater associated with unit 35 after an upset due to cold weather at its Sweeny refinery in Texas, according to a filing with the Texas Commission on Environmental Quality. [25]

February 14, 2014: Garland Says Phillips Has Plans to Process More Eagle Ford Crude at Sweeney Refinery

Greg Garland told security analysts at the Credit Suisse Global Energy Summit on February 12, 2014 that Phillips has plans to process more Eagle Ford crude at Sweeny and Alliance Refineries. "One of the things we find with the Eagle Ford crude, you hit limits because of bottleneck issues. So even in Alliance, which is 230 a day light sweet refinery, we hit limits of how much Eagle Ford we can process there. So we have projects at Alliance to debottleneck that if you will so we can process more Eagle Ford at Alliance. Similarly, Sweeny, these are projects that are $30 million or $40 million where you can take existing equipment, reconfigure, do a pre-flash tower, and we can get an incremental 5,000, 10,000 barrels a day through. But we're not going to invest $500 million or $600 million or $1 billion in adding capacity to do that. It'll be very incremental around the margin for us. So you should expect we can move to 350 to 360 and 370 maybe, but we're not going to take it to 500."[26]

December 18, 2013: Phillips Reports Emissions at Sweeny Refinery

Phillips reported a sudden failure of the PP splitter pressure control system that resulted in venting to flare which continued until the control system was repaired. [27]

November 15, 2013: Phillips Reports Planned Work at Sweeny Refinery

Reuters reported on November 15, 2013 that Phillips has warned of emissions from a fluidic catalytic cracking unit regenerator stack because of planned work at Sweeny Refinery. The planned maintenance will be performed to dislodge catalytic fines that have collected on the electrostatic precipitator grid.[28]

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.[29]

October 7, 2013: Phillips Reports Incinerator Shut at Sweeny Refinery

Phillips 66 shut an incinerator at its refinery in Sweeny, Texas, according to a filing with the Texas Commission on Environmental Quality. The company reported emissions from its sulfur recovery unit, the filing said. [30]

September 29, 2013: Phillips Reports Unit Start Up After Power Blip at Sweeny Refinery

Phillips 66 reported ethylene unit 33 will start up on or after September 29 after being forced to shut down on September 23 when a power blip occurred due to an owl hitting a transformer. [31]

September 23, 2013: Phillips Reports Units Online After Power Blip at Sweeny Refinery

Phillips 66 reported it restored power and brought units back online after a power interruption at its refinery in Sweeny, Texas, according to a filing with state pollution regulators. The refineryreported emissions from sulfur recovery units. [32]

July 31, 2013: Two Power Outages at Sweeny Were a Major Problem for Phillips

FuelFix reported on July 31, 2013 that Phillips 66 underperformed in the second quarter as its earnings dropped 19 percent because of higher costs for oil and outages that shut down key facilities. The refinery at Sweeny had two power outages that were a major problem. “We had a second power outage in the second quarter and in my view that’s unacceptable,” Garland said. The refinery is powered both by an on-site generation facility and by a power company. The power company was the cause of the two outages. “To me, personally, the biggest disappointment in the quarter was having a second power outage at Sweeny,” Garland added.[33]

"We are working with the third-party power supplier to upgrade their systems, their networks, we are looking at what we can do within refinery to recover from one of these incidents quicker around our own systems and balances," said Greg G. Maxwell, EVP, Finance and CFO. "There is a co-gen unit at Sweeny, it’s running sort 350,000 megawatt and we’ve used about 125,000 megawatt at the complex. So we are looking to say, what can we do to island that facility, technically it’s possible, practically difficult, but it can be done we’re working and then finally we are working to get a second supplier power into that complex. So that should be an event that is not repeated in the future. And so I think if you think for me personally and the biggest disappointment in the quarter was having a second power outage at Sweeny, which by the way impacts all the way across our businesses, so we had the refinery down, all the ethylene units were down, the frac was down. So it impacted all three business platforms that we had, and so we’ll absolutely get that one fixed."[34]

July 31, 2013: Phillips to Process More Light Oil at Sweeny 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."[35]

July 1, 2013: Phillips Reports Release of Hydrogen Cyanide at Sweeny Refinery

According to a filing with the National Response Center, two fluid catalytic cracking units (FCCUs) released hydrogen cyanide July 1. The report did not give a status on the FCCUs.[36]

June 11, 2013: Controller Failure Causes Delayed Coker Emissions at Sweeny Refinery

Phillips 66 reported flaring at its Sweeny refinery June 11 after the Unit 29.2 Delayed Coker Pressure Indicated Controller (PIC) valve opened due to a controller failure, according to a filing with the Texas Commission on Environmental Quality. The Unit 29.2 Delayed Coker and Unit 29 Flare are listed as sources of emissions.[37]

May 29, 2013: Unit 35 Shut Down at Sweeny Refinery

Retuers reported on May 29, 2013 that Unit 35 shut down at the Sweeny Refinery and that intermittent flaring occurred.[38] Phillips said a furnace problem caused Unit 35, previously identified as an Aromatics Unit, to shut down, a filing to Texas state environmental regulators. Aromatics, which are produced in the catalytic reforming of naphtha, are used in the production of petrochemicals and can be added to gasoline to raise its octane rating. Refinery operations personnel routed the emissions caused by the event to several of the plant's safety flare stacks intermittently throughout the day and worked to bring Unit 35 back on line. The emissions event lasted just under 12 hours.[39]

May 28, 2013: Furnace Stack Malfunction Shuts Unit at Sweeny Refinery

Phillips 66 reported that Unit 35 furnace at its Sweeny refinery tripped when a stack damper stuck in a closed position, which caused Unit 35 to shut, causing flaring, according to a filing with the Texas Commission on Environmental Quality. Intermittent flaring related to this incident continued for about 9 hours on May 28.[40]

May 20, 2013: Sweeny Refinery is Operational Again

Christine Harvey reported on Bloomberg on May 20, 2013 that Sweeny Refinery is operational again as Phillips completed a restart of the refinery after a power failure on May 11, 2013 caused the plant to temporarily shut down and flare gases, according to Rich Johnson, a company spokesman based in Houston.[41]

May 11, 2013: Power Outage Causes Shutdown at Sweeeny Refinery That Will Take Several Days to Restart

Fox Business reported on May 11, 2013 that according to a government filing Phillips shut down some units and decreased production on others on May 11, 2013 after a power outage at its Sweeny refinery. Units affected included the 25.2 crude distillation unit--one of the first steps in the oil refining process--and the 27.1 fluid catalytic cracking unit, a key gasoline production unit. The power outage started at 9 a.m. local time and was triggered by a larger outage in Texas and New Mexico. "This is an ongoing event," Phillips 66 said in the filing.[42]

Fox Business reported on May 12, 2013 that Phillips announced on May 12, 2013 that it would take "several days" to fully restart its Sweeny refinery in Old Ocean, Texas, after a power outage on May 11, 2013. "Power has been restored and the refinery is in the process of restarting, which is expected to take several days to complete," said Phillips 66 spokesman Rich Johnson.[43]

April 19, 2013: Transformer Malfunction Shuts Crude Unit, Causes FCCU Emissions at Sweeny Refinery

Phillips 66 reported a transformer malfunction near the Crude Unit No. 25.1 at its Sweeny refinery caused the unit to shut down, and forced operators to reduce rates, according to a filing with the Texas Commission on Environmental Quality. During this event, operators de-energized the Unit 27 fluid catalytic cracking unit (FCCU) electrostatic precipitator, causing emissions from the Unit 27 FCCU regenerator and Unit 27.1 FCCU regenerator. Operators later restored the FCCU electrostatic precipitator to normal service. On April 19, energy intelligence service Genscape reported the shutdown of a 123,500 b/d crude distillation unit and a 47,000 b/d FCCU at the refinery.[44]

April 16, 2013: Phillips Resumes Normal Operations at Sweeny Refinery after Steam Loss Affects Several Units

Phillips 66 reported that several units at its Sweeny refinery shut down the morning of April 16 following a loss of most of the plant’s steam supply, according to a filing with the Texas Commission on Environmental Quality. The steam loss was caused by an interruption in the natural gas supply to the adjacent cogeneration unit, which resulted in the shutdown of all the cogeneration turbines operating at the time. Operators were investigating the cause of the natural gas supply disruption. Following the loss of most steam, the refinery followed established steam shedding procedures and shut certain units down in a safe and controlled manner, which resulted in flaring. A backup boiler provided sufficient steam to allow some units to continue to operate. The natural gas supply to the cogeneration turbines was restored, and refining units re-started in a sequence to minimize emissions. Operators reported the refinery had resumed normal operations by the April 17.[45]

April 9, 2013: Unit Trips at Sweeny Refinery

Nasdaq reported on April 12, 2013 that Unit 38 tripped on April 9, 2013 while a depressure valve was being serviced at Sweeny Refinery according to a filing with the Texas Commission on Environmental Quality.[46]

March 26. 2013: Compressor Failure at Sweeny Refinery

Nasdaq reported on March 26, 2013 that Phillips in a filing with the National Response Center reported a compressor problem on March 25, 2013 at its Sweeny Refinery resulting in lower production rates.[47]

March 11, 2013: Power Outage at Sweeney Refinery Causes Chemical Release

Bloomberg reported on March 11, 2013 that Phillips released an unknown amount of hydrogen sulfide, sulfur dioxide and benzene at its Sweeny, Texas, oil refinery because of flaring after a power outage.[48] Fox News reported on March 14, 2013 that power at Sweeny Refinery has been fully restored and the plant is in the process of restarting after a third-party provided power failure on March 10. It will take several days for the refinery to reach normal operations, a Phillips 66 spokesman said.[49]

February 25, 2013: Phillips Restarting Pipestill, SRU at Sweeny Refinery after Extended Work

Phillips was restarting production units including a pipestill and sulfur recovery unit (SRU) at its Sweeny refinery on February 25, according to sources familiar with the operations. Several production units were shut in early January for planned work initially scheduled to run four weeks, but operators extended the work by two weeks for additional repairs. Sources had previously reported the refinery was on February 22 restarting a 124,000 b/d crude distillation unit and a coking unit. A Phillips 66 spokesman said February 25 that maintenance was still underway.[50]

February 22, 2013: Phillips Begins Restarting 124,000 b/d CDU and Coker Unit at Sweeny Refinery after Extended Work

Phillips 66 was restarting a 124,000 b/d crude distillation unit (CDU) and a coking unit at its Sweeny refinery on February 22, according to sources familiar with refinery operations. Operators began restarting the units earlier in the week and expected initial production to begin this week, with full production restored by mid-March. The CDU and coker were shut in early January for planned work initially scheduled to run four weeks, but operators extended the work by two weeks for additional repairs.[51]

February 18, 2013: Phillips Reports Coker and FCCU Emissions at Sweeny Refinery

Phillips 66 reported reported emissions from a coker and from the Unit 27 FCCU on February 18 were due to a malfunction in the instrument air header, which led to a decision by operators to de-energize the electrostatic precipitators and thus created excess emissions.[52]

February 14, 2013: Phillips Restarts FCCU after Electrical Trip at Sweeny Refinery

Phillips 66 reported it was restarting the Unit 27 fluid catalytic cracking unit (FCCU) at its Sweeny refinery on February 14 after an electrical feeder trip shut the unit, resulting in emissions from the FCCU and the coker,

February 7, 2013: Production Units Restart at Sweeney Refinery After Planned Maintenance

Bloomberg reported on February 25, 2013 that production units including a pipestill and sulfur recovery unit wee restarting after planned maintenance that began on January 7, 2013 according to two people familiar with the operations who asked not to be identified because the information isn’t public. [53]

January 30, 2013: Garland Says Phillips Has Completely Backed Out US Light Sweet Crude from Sweeney 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 Sweeney.[54]

January 6, 2013: Compressor Trip Causes Flaring at Sweeny Refinery

Phillips 66 reported a compressor on Unit 26.2 at its Sweeny refinery tripped, according to a filing with the Texas Commission on Environmental Quality.[55]

October 31, 2012: Sweeny Refinery to Receive 30,000 barrels per day of Eagle Ford Crude by Early 2014

Tim Taylorl reported at the Phillips Third Quarter Earnings Conference on October 31, 2012 that Phillips had reached agreement with Kinder Morgan to deliver up to 30,000 barrels per day of Eagle Ford crude via a new pipeline connection to our Sweeny refinery in early 2014. "That's actually a project or a connector pipeline that's relatively short that will be built by Kinder Morgan. And so that's a throughput pipeline connection agreement that we have specifically for that."[56]

September 30, 2012: Process Units Restarted at Sweeny Refinery after Power Outage

Nasdaq reported on October 1, 2012 that Philips restarted process units at its Sweeny Refinery on September 30, 2012 following an early morning power outage. The outage caused flaring and opacity as some units shut down; some went into circulation mode, and some reduced charge rates, a government filing said.[57]

September 11, 2012: Sweeny Refinery Reports Release from Thermal Oxidizer

Reuters reported on September 11, 2012 that there was a benzene release from a thermal oxidizer Sweeny Refinery, according to a filing with national pollution regulators.[58]

August 23, 2012: New Pipeline to Transport up to 30,000 bpd of Advantaged Eagle Ford Shale Crude to Sweeney Refinery

PR Newswire reported on August 23, 2012 that Kinder Morgan plans invest $90 million to build a 27-mile, 12-inch diameter lateral pipeline to extend its Kinder Morgan Crude Condensate (KMCC) pipeline to transport Eagle Ford crude and condensate to Phillips 66’s Sweeny Refinery. The pipeline will have an initial capacity of 30,000 barrels per day (bpd) of capacity, expandable to 100,000 bpd. “This pipeline lateral will provide yet another attractive delivery point for customers of our KMCC pipeline while providing Phillips 66 with enhanced access to price-advantaged Eagle Ford crude and condensate,” said KMP Products Pipelines President Tom Bannigan. Kinder Morgan’s crude/condensate pipeline, which was ready for service in June 2012, already transports crude/condensate from the Eagle Ford shale to the Houston Ship Channel through 65 miles of new-build construction and 113 miles of converted natural gas pipeline. “This agreement aligns with a fundamental part of the Phillips 66 business strategy to get advantaged crude to our refineries,” said Glenn Simpson, general manager, Phillips 66 Crude & International Supply.[59] The Eagle Ford formation is located close to the U.S. Gulf Coast and the largest concentration of U.S. refineries. Eagle Ford crude was priced at $93.75 a barrel on Agust 22, 2012, about a $3 discount to U.S. crude benchmark West Texas Intermediate and a $19 discount to Louisiana Light Sweet.[60]

August 2, 2012: FCCU Emissions During Rapper System Repairs at Sweeney Refinery

Phillips 66 reported it would begin repairs on August 2, 2012 to fix a short circuit detected this week at its Sweeney refinery, according to a filing with the Texas Commission on Environmental Quality. The short circuit was causing a portion of the rapper system to operate abnormally and had ultimately led to emissions, the filing said. After locating the problem and making the necessary repairs, operators will return the system to service. The filing lists a fluid catalytic cracking unit (FCCU) as a source of emissions, which were expected to continue until August 9.[61]

August 1, 2012: Phillips to Run 40,000 bpd of Advantaged Crudes to Sweeney Refinery

Phillips reported during their second-quarters earnings report on August 1, 2012 that Phillips wants to move the shale crudes from 120,000 to ultimately 450,000 to 460,000 barrels a day and has a plan to get advantaged crude into most of Phillips' refineries. "We are trying to get those crudes to every refinery we can," said Phillips CEO Greg Garland. "Sweeny about 40,000 barrels a day."[62]

CNBC reported on August 23, 2012 that Phillips 66's Sweeny, Texas, refinery will take 30,000 bpd of Eagle Ford oil beginning in 2014 when Kinder Morgan Energy Partners completes a $90-million extension of a pipeline to the plant, which is 66 miles south of Houston. Light, sweet Eagle Ford crude is lower-priced than other global crudes, which increases profitability for refiners by cutting their crude costs. Eagle Ford crude was recently priced at $93.75 a barrel, about a $3 discount to U.S. crude benchmark West Texas Intermediate and a $19 discount to Louisiana Light Sweet.[63]

July 16, 2012: Fluid Catalytic Cracking Unit Restarted at Sweeney Refinery

On July 25, 2012 Reuters reported that the Fluid Catalytic Cracking Unit (FCCU) restarted at the Sweeney Refinery on July 16, 2012.[64]

July 12, 2012: Coker Flare at Sweeney Refinery

Reuters reported on June 13, 2012 there was a Coker Flare at the Sweeney Refinery on July 12, 2012.[65] Businessweek reported on July 12, 2012 that the refinery reported emissions from coker and fluid catalytic cracker No. 3, according to a filing with the Texas Commission on Environmental Quality. The maintenance event began yesterday at 6:22 a.m. local time and lasted until 11:22 a.m. today, the company said.[66]

July 5, 2012: Unplanned Work at Sweeney Refinery

Reuters reported on June 13, 2012 there was unplanned work at the Sweeney Refinery on July 5, 2012.[67]

July 1, 2012: Leaks Repaired on a portion of Fluidic Catalytic Cracking Unit at Sweeney Refinery

Reuters reported on July 1, 2012 that Phillips repaired leaks on a portion of the gasoline-producing fluidic catalytic cracking unit on June 30 and July 1 after the refinery found oil oozing from welds on a box attached to the unit's riser to repair a hot spot found between a month and two months ago, according to a notice the refinery filed with state pollution regulators. Additional welding was done on the box to repair the leaks, but the work resulted in increased release of particulate matter and carbon monoxide.[68]

May 12, 2012: Power Outage at Sweeny Refinery

Reuters reported on May 13, 2012 that the Sweeny refinery restarted on May 12, 2012 after a power outage hit the refinery affecting the sulfur recovery unit according to a notice the refinery filed with Texas pollution regulators.[69]

References

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  2. Reuters. "RPT-Surprise pause in Cushing oil stock rise likely blip, not trend" by Catherine Ngai. April 7, 2015.
  3. The Facts. "Sweeny ISD, industry christen petrochemical academy" by Andy Packard. January 22, 2015.
  4. Argus. "Phillips 66 files condensate splitter permit" December 8, 2014.
  5. Yahoo News. "Phillips files for permit to build condensate splitter in Sweeny, TX" December 8, 2014.
  6. Reuters. "Phillips begins FCCU overhaul at Sweeny, TX refinery" September 3, 2014.
  7. Barclays CEO Energy-Power Conference. "Presentation by Greg Garland" September 3, 2014.
  8. FuelFix. "Phillips 66 earnings fall with disappointments" by Zain Shauk. July 31, 2013.
  9. Hydrocarbon Processing. "Phillips 66, Chevron Phillips to fund new Texas petrochemical academy" Augusut 15, 2014.
  10. Houston Business Journal. "Phillips 66 breaks ground in Freeport" by Jordan Blum. August 13, 2014.
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  12. Fuelfix. "Phillips 66 increases capital budget, approves more buybacks" July 10, 2014
  13. US Department of Energy. "Energy Assurance Daily" July 7, 2014
  14. US Department of Energy. "Energy Assurance Daily" June 6, 2014
  15. FuelFix. "Phillips 66 says court supports Sweeny takeover from PDVSA" May 28, 2014.
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  17. CSP Daily News. "Phillips 66 to Pay $500,000 Over Clean Air Act Violations" March 26, 2014.
  18. United Steelworkers. Refinery Events March 21 – March 27, 2014
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  20. Bloomberg. "BP Splitter Refinery Seen Skirting U.S. Oil Export Ban" by Alex Nussbaum and Bradley Olson. March 6, 2014.
  21. Slashdot. "BP Finds Way To Bypass US Crude Export Ban" by Hugh Pickens. March 7, 2014.
  22. Slashdot. "US Now Produces More Oil and Gas Than Russia and Saudi Arabia" by Hugh Pickens. October 7, 2014.
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  25. US Department of Energy. "Energy Assurance Daily", March 5, 2014
  26. Credit Suisse Global Energy Summit. "Transcript of Phillips 66 Presentation" by Greg Garland. February 12, 2014
  27. United Steelworkers. Refinery Events - (Dec. 13, 2013 through Dec. 19, 2013)
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  29. Seeking Alpha. "Phillips 66's CEO Discusses Q3 2013 Results - Earnings Call Transcript" October 30, 2013.
  30. United Steelworkers. Refinery Events - (Oct. 2, 2013 through Oct. 10, 2013)
  31. United Steelworkers. Refinery Events September 27, 2013—October 1, 2013
  32. United Steelworkers. Refinery Events September 20, 2013— September 26, 2013
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  35. Seeking Alpha. "Phillips 66's CEO Discusses Q2 2013 Results - Earnings Call Transcript" July 31, 2013.
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  37. United Steelworkers. Refinery Events - (June 7, 2013 through June 13, 2013)
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  51. United Steelworkers. Refinery Events - (Feb. 22, 2013 through Feb. 28, 2013)
  52. United Steelworkers. Refinery Events - (Feb. 15, 2013 through Feb. 21, 2013)
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  65. Reuters. "U.S. refinery shutdowns-Phillips 66, Tesoro, Exxon" July 13, 2012.
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  67. Reuters. "U.S. refinery shutdowns-Phillips 66, Tesoro, Exxon" July 13, 2012.
  68. Reuters. "Phillips Sweeny refinery fixes leak on FCC - filing" July 1, 2012.
  69. Reuters. "Phillips 66 Sweeny refinery restarting" May 13. 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


Other Locations

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