(Corrects academic degree to chemical engineering in 6th paragraph)
HOUSTON, Aug 9 (Reuters) - Phillips 66, the fourth largest U.S. oil refiner, is weighing a broader move into developing battery components for electric vehicles and storage systems, according to top executives, leveraging its own and others’ research as it accelerates a shift from fossil fuels.
Phillips 66, which gets the bulk of its profits from processing oil into gasoline, diesel and petrochemicals, has become one of the largest supplies of a graphite used to make a key component in electric vehicles. It recently formed an “emerging energy” unit to explore new markets for hydrogen and low-carbon fuels.
“The U.S. refining business in the future is going to be smaller, not bigger,” Chief Executive Greg Garland told reporters at its headquarters on Monday.
Battery research and partnerships would pivot beyond its small but lucrative materials business. Phillips 66’s existing business - supplying materials for companies building graphite anodes for EV batteries - has been valued at more than $1 billion. The anode is about 10% to 15% of a lithium-ion battery’s cost.
“We want to play a larger role in the value chain,” said Chief Operating Officer Mark Lashier. “We are still looking at the entire chain and how to best integrate that.”
Lashier, who holds a PhD in chemical engineering, became Phillips 66’s second-in-command in April after running the Chevron-Phillips Chemical joint venture since 2017. The company also is building EV charging and hydrogen refueling stations in Europe as it explores non-fossil fuel businesses.
“There is going to be a battery supply chain in North America, a battery supply chain in Europe,” said Garland. “That’s an opportunity for us: To take a raw material competitive advantage and lever that further down the value chain in batteries.”
Phillips 66 this week said it invested $150 million to buy a 16% stake in Novonix Ltd, an Australian company that processes refinery byproducts into synthetic graphite for EV batteries.
Earlier it struck a technology deal with U.K.-based Faradion Ltd to develop materials for sodium-ion batteries, another type of advanced batteries for energy storage and backup power.
The agreements give Phillips 66 insight into key battery developments that it can use to build its business, said Lashier. (Reporting by Gary McWilliams Editing by Marguerita Choy)
Our Standards: The Thomson Reuters Trust Principles.