Phillips 66 has approved a $2.4 billion capital budget for 2026, slightly above its 2025 outlook, as the company sharpens its focus on midstream expansion and higher-return refining projects.
The move reinforces the U.S. refiner’s strategy to enhance margins, cash flow, and shareholder returns, CEO Mark Lashier said.
🔹 Capital Allocation Shift
- Midstream capex: $1.1B (vs. ~$975M in 2025)
- Refining capex: $1.1B (vs. ~$822M in 2025)
🔹 Key Midstream Growth Projects
- Iron Mesa gas processing plant (Permian Basin):
- 300 MMcf/d capacity
- Expected startup: Q1 2027
- Coastal Bend NGL pipeline expansion:
- Capacity rising to 350,000 bpd by Q4 2026
- Corpus Christi fractionator (planned):
- +100,000 bpd NGL fractionation capacity
- Final investment decision: early 2026
- Target completion: 2028
🔹 Refining Focus
- Humber gasoline quality improvement project (startup expected Q2 2027)
- 100+ smaller projects to improve crude flexibility, feedstock optimisation, and clean-product yields
- Full ownership of WRB Refining (Illinois & Texas) enhances crude processing optionality following the Cenovus buyout
🔹 Strategic Takeaway
Phillips 66 is clearly reallocating capital toward assets with stronger returns and structural margin uplift, reinforcing its integrated model while maintaining disciplined growth.