HOUSTON (Reuters) - The CEO of Phillips 66, (PSX.N) the newest U.S. independent refiner, said on Tuesday it aims to process more shale oil “everywhere we can get it.”
“We want to increase our exposure in both the West Coast and East Coast for some of those advantaged barrels,” Greg Garland told Reuters in an interview on the company’s first day as a pure-play refining, midstream and chemicals company split off from ConocoPhillips (COP.N).
That includes more rail unloading, rail cars and storage to facilitate, in the medium term, movement of cheaper inland crude to coastal markets until more pipelines are built to alleviate bottlenecks, he said.
Phillips 66 is the only refiner that has plants in all U.S. markets.
Garland noted several refineries are already well positioned to receive shale oil, such as its 247,000 barrels-per-day (bpd) refinery in Sweeny, Texas, in proximity to the state’s prolific Eagle Ford shale play, or Midwest plants.
The company last fall also ran unit trains from the Bakken shale oil play in North Dakota to its 238,000 bpd Bayway refinery in Linden, New Jersey, and has taken trains to West Coast refineries.
“You’ll see us stepping out and doing some more things around infrastructure,” he said. “Like everyone else, we’re doing everything we can to get more barrels in front of those facilities.”
Phillips 66 aims to double refined product exports to 200,000 bpd in the next two years, but its 247,000 bpd Alliance refinery in Belle Chasse, Louisiana -- which runs light-sweet crude -- is on the block.
Increasing U.S. light-sweet inland shale oil output along with more infrastructure to move it to the refinery-heavy Gulf Coast means more advantaged crude prices could show up in the region in the coming years, increasing Alliance’s value, Garland said. If the price isn’t right for what he called “a good export platform for us,” Phillips 66 will keep it, he said.
“We wouldn’t let the refinery go cheap,” he said.
Garland said he was pleased with the sale announced on Monday of Phillips 66’s 185,000 bpd Trainer, Pennsylvania, refinery to Delta Air Lines Inc (DAL.N) for $150 million plus a $30 million in state assistance. <ID:L1E8FUED7>
“We think Delta’s a reputable buyer. They know how to manage and run complex businesses,” Garland said.
However, the company aims to keep the Bayway plant and its foothold in the East Coast refining market.
“It’s a good machine. It should be the last refinery standing in PADD I,” he said.
Phillips 66 is not actively seeking acquisitions of refineries or other assets, and instead is focused on growth in its midstream, transportation, logistics and chemicals businesses.
“You never say never, there may be some point in the future when we might want to do that,” Garland said. “I don’t see us right out of the gate thinking about acquisitions.”
Reporting By Kristen Hays