Natural gas liquids are fueling Phillips 66's expansion plans in the Permian Basin. The company announced May 3 plans to construct the Iron Mesa gas plant, a 300 million cubic feet per day facility that is expected to enter service in early 2027.
Phillips 66 officials tell the Reporter-Telegram that the new plant will be near its Goldsmith and James Lake facilities. The location was chosen to offer supply optionality from both the Delaware and Midland basins. It will also accommodate future gathering and processing building and is already tied into the company's NGL takeaway pipelines.
Officials say Iron Mesa will increase regional processing capacity by 25%. It is supported by incremental dedicated supply from existing and new producers on Phillips 66's gathering system. The new gas processing plant will reduce costs, improve reliability, and handle growth that supplies additional NGLs to the company's transportation and fractionation assets.
Donald Baldridge, Phillips 66 executive vice president of midstream and chemicals, told analysts during its first quarter earnings call the new plant "just demonstrates the progress we're making in building out our NGL value chain."
Baldridge said additional benefits from the new project including allowing Phillips 66 to retire portions of its Goldsmith facility and upgrade processing.
"That's going to improve our operational efficiencies, our reliability reduces our environmental footprint, improves our cost structure in that area," he said.
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