In Phillips 66’s (NYSE: PSX) latest earnings report, the company indicated that it hopes to expand domestic shale oil operations by increasing its export capacity at refineries on the West Coast and in the Gulf Coast region, using over 200,000 barrels per day.
Last year, the company used 112,000 barrels of shale oil a day. But it obtained a new tanker in January, which will allow for transportation of this extra crude, as will some 2,000 railcars that Phillips 66 expects to acquire in February.
“This is definitely something that oil refiners are going to follow suit with,” said Carl Larry, president of Houston- based Oil Outlooks & Opinions LLC. “It’s surprising to see this much shale being used, with limited resources outside of railcars.”
In Q4 2012, Phillips 66 processed around 135,000 barrels per day— twice the figure from a year prior. By the end of this year, the company’s refinery export capacity will be up to 370,000 bpd.
A new project in Ferndale, Wash. is expected to be completed by Q1 of this year. That’d increase capacity by 20,000 bpd, and other projects are planned for the West Coast and Gulf Coast.
Finally, the company expects to move natural gas liquids on the DCP Midstream pipelines, which Phillips 66 jointly owns with Spectra Energy Corp. (NYSE: SE).
It currently has the Sand Hills pipeline in the Eagle Ford region in operation, but a second phase connecting with the Permian Basin will be operational around the middle of this year.