Phillips 66 announced a $2.4 billion capital budget for 2026, allocating $1.1 billion to sustaining capital and $1.3 billion to growth capital. The plan is designed to maintain reliability across the company’s integrated downstream network while pursuing high‑margin opportunities in the natural‑gas liquids (NGL) value chain and refining operations.
The budget is split across segments as follows: Midstream receives $1.1 billion ($400 million sustaining, $700 million growth), Refining receives $1.1 billion ($590 million sustaining, $520 million growth), Chemicals receives $30 million, Marketing & Specialties receives $80 million, Renewable Fuels receives $40 million, and corporate functions receive $40 million. This allocation reflects the company’s emphasis on core downstream assets while still supporting ancillary businesses.
Phillips 66’s debt‑reduction target is to reach $17 billion in total debt by 2027, not by year‑end 2025 as previously reported. The 2026 budget includes $200 million of sustaining capital and $100 million of growth capital that were added as part of the WRB Refining consolidation, bringing the total 2026 capital outlay to $2.4 billion from $2.1 billion in 2025—a $300 million increase that signals confidence in future cash‑flow generation.
The company’s focus on NGL and refining growth is consistent with its well‑to‑market strategy, which seeks to capture higher‑margin products and leverage operational efficiencies. Management highlighted that the growth capital will fund projects such as the Iron Mesa gas‑processing plant, the Coastal Bend NGL pipeline expansion, and the Humber gasoline‑quality improvement project, all of which are expected to enhance throughput and product quality.
Mark Lashier, Chairman and CEO, said the budget “demonstrates our disciplined approach to capital allocation, balancing sustaining investments that protect reliability with growth projects that drive long‑term value.” He added that the company remains committed to returning over 50 % of net operating cash flow to shareholders while maintaining a strong balance sheet.
The announcement underscores Phillips 66’s strategy to strengthen its downstream footprint, improve margins, and support shareholder returns, positioning the company for continued profitability in a dynamic energy market.
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