Phillips 66 starts up new fractionator near Houston after delay

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Phillips 66 began operating a 100,000 barrels-per-day fractionator near Houston that was delayed two months because of a mechanical problem, the company said on Tuesday.

The Sweeny Fractionator One is southwest of Houston at Phillips 66’s complex in Old Ocean. A fractionator takes natural gas liquids and separates them out into individual component products like ethane, butane and propane. The products are sold to the petrochemical sector and heating markets.

The project is supported by 250 miles of new pipelines and a multimillion-barrel storage cavern complex.

Bob Herman, executive vice president for Phillips 66 midstream business, called the startup a significant milestone for the company’s growth. He said the plan is to add more capacity in the future.

Houston-based Phillips 66 had planned to build a second fractionator, but that project was delayed because of weak market conditions. But he fractionator is still in the works, and a final investment decision on the project is expected in 2016.

Phillips 66 will have the ability to export the liquefied petroleum gases produced at the fractionator once Phillips 66’s Freeport LPG Export Terminal is completed south of Houston in the second half of 2016.

Sweeny Fractionator One and the Freeport LPG Export Terminal represent a combined capital investment of more than $3 billion.

The fractionator was originally expected to start up in early October, but Phillips 66 confirmed there was a mechanical problem with a furnace that took time to correct.

Phillips 66 will cut capital spending by nearly 20 percent in 2016, with the comapny’s growth focused largely on pipeline, storage and terminal projects. The company is building more pipelines to carry crude from North Dakota’s Bakken Shale, while also increasing storage capacity closer to home at its Beaumont terminal in Nederland. Phillips 66 is building the Bayou Bridge pipeline to move crude from Texas to Louisiana markets.