HOUSTON — Refining and midstream giant Phillips 66 announced that it would increase its 2014 capital budget by $1.2 billion this year in order to fund its liquefied petroleum gas project as well as a recent acquisition.
The company said its board authorized $3.9 billion in capital expenditures, up from a previously-approved budget of $2.7 billion.
The increase will allow the company to put more cash towards the development of a new fractionator at its Sweeny refinery and a liquid petroleum gas export terminal in Freeport, among other projects.
Dennis Nuss, a spokesman for Phillips 66, said the overall timetable and budget for those projects remain unchanged, but the move will allow the company to pay for a larger portion of the projects this year with cash, reducing its reliance on more costly financing.
The fractionator is expected to come online in the third quarter of 2015, and the export terminal is expected to be operational in mid-2016, Nuss said.
The fracionator will separate natural gas liquids into components including ethane, propane and butane. Some of those products will then be exported as liquefied petroleum gas from Freeport. The entire project is slated to cost $3 billion.
The budget hike will also help fund as well as fund the recently announced acquisitions of a storage terminal in Beaumont and Spectrum Corp., a lubricants company. Both those deals were announced last month.
The company’s board also approved an additional $2 billion share repurchase program. All total, since the third quarter of 2012, Phillips 66’s board has authorized $7 billion in share buybacks. The company has repurchased $3.2 billion in shares in that time span.
The company also announced a 50 cent quarterly dividend this week.