Phillips 66 (NYSE:PSX) announced plans to develop two new midstream infrastructure projects, including the Zeus Gas Plant and a third Coastal Bend Fractionator, with both facilities expected to begin operations in 2028.
New Permian gas plant to expand processing capacity
The Zeus project will consist of a natural gas processing facility capable of handling 300 million cubic feet per day in the Permian Basin.
As part of the development, Phillips 66 will also construct the Midland Express Pipeline, a 45-mile, 20-inch pipeline designed to connect the company’s Permian gathering systems.
The pipeline is expected to transport up to 230 million cubic feet per day of wellhead natural gas.
Coastal Bend expansion targets rising NGL demand
The company also plans to build a third Coastal Bend Fractionator in Robstown, Texas.
The facility will have the capacity to process 100,000 barrels per day of natural gas liquids and will include expansions to NGL purity pipeline infrastructure along with additional water treatment facilities.
“Zeus Gas Plant and a third Coastal Bend Fractionator will strengthen our ability to move growing Permian volumes across an integrated value chain, from the wellhead to key market centers,” said Don Baldridge, executive vice president of Midstream at Phillips 66.
Projects remain within capital spending targets
Phillips 66 said both developments fit within the company’s previously announced annual capital spending framework of between $2.0 billion and $2.5 billion.
The company also reaffirmed its commitment to lowering total debt to $17 billion by the end of 2027 while returning more than 50% of net operating cash flow, excluding working capital effects, to shareholders.
According to Phillips 66, the projects are intended to support expected growth in Permian Basin production from customer-dedicated acreage by increasing gas processing and fractionation capacity over the coming years.