Phillips 66 (NYSE:PSX) Q3 2020 Earnings Conference Call - Final Transcript

Oct 30, 2020 • 12:00 pm ET

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Phillips 66 (NYSE:PSX) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Greg C. Garland

growth strategy and achieved a major milestone with the completion of Sweeny Hub Phase 2 expansion. We completed the two new 150,000 barrel a day fractionators at the Sweeny Hub, bringing the site's total fractionation capacity to 400,000 barrels per day. Frac 2 reached full rates in September and Frac 3 started operations in October. Both fractionators is operating at rates exceeding design capacity.

The fractionators are supported by long-term customer commitments. Phillips 66 Partners continued construction on the C2G Pipeline, connecting its Clemens storage Caverns to petrochemical facilities in the Corpus Christi area. The project is backed by long-term commitments and is expected to be completed in mid-2021.

At the South Texas Gateway Terminal, the first dock and 5.1 million barrels of storage capacity have been commissioned. Terminal operations are expected to ramp-up through the end of this year as additional phases of construction are finished. We expect the project to be completed in the first quarter of 2021 with a total storage capacity of 8.6 million barrels and up to 800,000 barrels per day of export capacity. Phillips 66 Partners owns 25% interest in the terminal.

As we wrap up our major projects and execution this year, we expect that total capital spending for 2021 will be $2 billion or less. We look forward to sharing the details of our 2021 capital program with you in December, following the approval of our Board.

Phillips 66 recognizes the climate challenge and is making investments to competitively position the Company for a lower carbon future. Recently, we announced plans to reconfigure our San Francisco Refinery in Rodeo, California into the world's largest renewable fuels facility to meet the growing demand for renewable energy. The plant will no longer produce fuels from crude oil, but instead will have the flexibility to run used cooking oil, fats, greases, and other feedstocks.

Upon completion in early 2024, the facility will have over 50,000 barrels per day or 800 million gallons per year of renewable fuel production capacity. This capital efficient investment is expected to deliver strong returns. The conversion is expected to reduce the plant's greenhouse gas emissions by 50% and help California meet its low carbon objectives.

Earlier this month, CPChem announced its first commercial scale production of polyethylene from recycled mixed waste plastics. This development is an important milestone, further demonstrating CPChem's commitment to proactively help the world find sustainable solutions including elimination of plastics waste in the environment. We have a dual challenge of providing affordable, abundant, reliable energy to the world and also addressing the global climate challenge. Our company is committed to both while continuing to deliver shareholder returns.

So with that, I'll turn the call over to Kevin to review the financials.

Executive
Kevin J. Mitchell

Thank you, Greg. Hello, everyone. Starting with an overview on Slide 4, we summarize our financial results. We reported a third quarter loss of $799 million. We had special items amounting to an after-tax loss of $798 million including impairments related to the planned conversion