“We delivered good operating performance, generated strong cash flow and made significant progress in several growth initiatives during the quarter,” said Greg Garland, chairman and CEO of Phillips 66. “The Bakken Pipeline and new storage capacity at the Beaumont Terminal were placed into service, and CPChem reached mechanical completion of two polyethylene units as part of its U.S. Gulf Coast Petrochemicals Project. Additionally, the Billings Refinery completed an advantaged crude project to enhance returns. The completion of these projects improves our future earnings and cash generation capability.”

“In the quarter, we raised our dividend by 11 percent and increased share repurchases, returning $741 million to shareholders. In our first five years as a company, we have increased the dividend at a 30 percent compound annual growth rate and have repurchased or exchanged 131 million shares, representing more than 20 percent of our initial shares outstanding.”

Strategic Update

Phillips 66 reached significant investment milestones during the second quarter as major capital projects were completed in Midstream, Chemicals and Refining.

In Midstream, Phillips 66 has a 25 percent interest in joint ventures that own the 520,000 BPD Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline, collectively referred to as the Bakken Pipeline. Commercial operations started during the second quarter.

At the company’s Beaumont Terminal, 1.2 million barrels of product storage was placed in service during the quarter. An additional 2.2 million barrels of crude storage is planned to be in service in the second half of 2018. Expansion of the terminal’s export facilities, from a current capacity of 400,000 BPD to 600,000 BPD, is scheduled to be completed in the first quarter of 2018.

Phillips 66 Partners is advancing its organic growth program. Progress continues on the Bayou Bridge Pipeline segment from Lake Charles to St. James, Louisiana, with commercial operations expected to begin in the first quarter of 2018.

DCP Midstream is expanding the Sand Hills NGL Pipeline capacity from 280,000 BPD to 365,000 BPD, with an expected in-service date in the fourth quarter of 2017. In addition, DCP announced plans to further expand the line to approximately 450,000 BPD. Sand Hills is owned two-thirds by DCP and one-third by Phillips 66 Partners. DCP is also expanding its footprint in the DJ Basin with construction of the Mewbourn 3 gas processing plant, which is expected to start up in the fourth quarter of 2018.

CPChem completed a major milestone of its U.S. Gulf Coast Petrochemicals Project as the two 1.1-billion-pound-per-year polyethylene derivative units reached mechanical completion in June. The ethane cracker is expected to be mechanically complete in the fourth quarter of 2017. This project will increase CPChem’s global ethylene and polyethylene capacity by approximately one-third.

In Refining, the company increased its heavy crude processing capability at the Billings Refinery to 100 percent with the startup of a new vacuum distillation unit. At both the Bayway and Wood River refineries, the company is modernizing fluid catalytic cracking units to increase clean product yield. Both projects are expected to be complete in the first half of 2018. Phillips 66 is also implementing yield improvement efforts at several other refineries, including Ponca City, where a diesel recovery project is expected to be complete in the third quarter of 2017.

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