Phillips 66 (PSX) will spend up to $1.5 billion in capital in 2012, mainly to increase the amount of crude its refineries take from the North American Mid-continent region, the company said Wednesday.
Refiners in the U.S. are working to bring more crude oil from south Texas, North Dakota and other regions to their refinery gates. A boom in U.S. oil production, led by advances in drilling technology, has made such crude oil cheaper than that imported into coastal regions.
"We're looking at pipeline, rail, truck and barge--any way we can get advantaged crude there," Phillips 66 Chief Executive Greg Garland said during a call with investors.
Phillips 66 is bringing crude oil from the Mississippi Lime shale formation to its 198,000-barrel-a-day refinery in Ponca City, Okla. It also bought 2,000 rail cars to bring Mid-continent crude the East and West Coasts, and potentially other refineries in between.
Phillips 66 will also expand the export capacity of its refineries to about 220,000 barrels a day by 2013, Mr. Garland said. With U.S. fuel demand stagnant, refiners are growing sales of diesel to Europe and gasoline to Latin America. The company exported 90,000 barrels a day of fuel in the second quarter, Mr. Garland said.
Copyright (c) 2012 Dow Jones & Company, Inc.