Originally built by the U.S. government in 1942 during a World War II effort to thwart maritime attacks, the Sweeny Refinery in Old Ocean, Texas, stands today as a gleaming symbol of downstream industry—Phillips 66’s largest refinery based on capacity.

Sprawled across more than 10,550 acres—large enough to tuck inside several cities the size of the nearby town it was named for—the Sweeny Refinery produces 247,000 barrels (bbl) of product per day, including gasoline, ultra-low sulfur diesel, jet fuel, fuel-grade petroleum coke, as well as other petrochemicals and solvents. Facilities featured at the site include catalytic cracking, delayed coking, alkylation, a continuous regeneration reformer and hydrodesulfurization units.

A recent tour of the facility began in its massive, circular control room where up to 110 people work at a time in 12-hour shifts. As such, there’s a kitchen for meals and treadmills for exercise throughout the workspace, several of which are positioned intermittently beside dozens of computer screens. Workers monitor pressures and product in what appears to be a never-ending cycle of checks and balances.

To walk the premises, workers must don fire-retardant clothing, protective gear from head to toe, including goggles and gloves, ear plugs and heavy-duty boots. Both personal safety and protecting the environment is paramount, Willie Tempton Jr., the refinery manager, told Midstream Business.

Eagle Ford sweet

About 30% of the crude refined in Sweeny is the sweet stuff from the Eagle Ford Shale in South Texas. The hydrocarbons are heated to 600 F and then piped to the separator to be transformed.

Before the Eagle Ford took off, much of the light, sweet crude processed in Sweeny came from West Africa. The feedstock is either barged in to the refinery or piped via Kinder Morgan’s lateral pipeline.

Most of the heavy, high-sulfur crude oil distilled at the refinery comes from Latin America. The sour crude is also warmed up, closer to 800 F, and then sent to the separator. From these processes, Phillips 66 can produce petrochemical feedstock, home heating oil and coke. These products are then delivered throughout the Midwest and southeastern U.S. via pipeline, barge and railroad.

Indeed, it’s a busy time to be in the midstream space. The refinery also operates nearby terminals and storage facilities in Freeport, Jones Creek and on the San Bernard River.

Jim Webster, Phillips 66 midstream general manager, told Midstream Business that for NGL throughout the early 2000s, the entire value chain was static, but things are ramping up with shale.

“There had to be increases in all stages of the value chain,” he added.

Phillips 66 in the midstream

For Phillips 66’s midstream operations, growth is going to come in the form of transportation systems and chemicals. The company announced in February its plans to move forward on its Sweeny Fractionator One and the Freeport Petroleum Gas Export Terminal—an investment of more than $3 billion.

“Given the anticipated growth in natural gas liquids production, we see substantial advantages in having fractionation and export facilities on the Gulf Coast outside of Mont Belvieu,” said Tim Taylor, the firm’s executive vice president for commercial, marketing, transportation and business development. “These projects allow us to maximize our existing structure and will position us for further growth.”

Early site work is already underway at the Sweeny Fractionator One in Old Ocean, just at the corner of plant’s NGL Road and LPG Road. The permitting process is ongoing, explained Tempton. The Fractionator One facility is designed to supply NGL to the petrochemical and heating markets. Mixed NGL (Y-grade) supplies will come from nearby pipelines, including the Sand Hills Pipeline, in which Phillips 66 owns a 33% interest through its partnership with DCP Midstream and Spectra Energy. The 100,000 bbl/d NGL fractionator is expected to start up during third-quarter 2015.

The new fractionator is significant for Phillips 66 on a number of fronts, most specifically, it’s the first such facility the company will wholly own and operate. What’s more, the fractionator will also process the company’s first exports of propane and butane.

Imports to exports

The nearby Freeport LPG Export Terminal will be located at Phillips’ existing marine terminal that historically has been used to import crude oil and export processed chemicals. The restructured terminal will have an initial export capacity of 4.4 million bbl per month—the equivalent of eight large gas carriers with a ship-loading rate of 36,000 bbl per hour, the company said. That project is expected to be online mid-2016, at which point it will export the propane and butane products.

Webster said Phillips 66 is also weighing a condensate splitter at the refinery, which would provide additional feedstock to run downstream operations.

Analysts with Simmons & Co. International said in a recent note to investors that the investment is expected to pay off.

“With anticipated growth in NGL production in the U.S., the company stands to benefit from having additional fractionation and export facilities on the Gulf Coast, while maintaining existing facilities at Mont Belvieu,” analysts said.

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