HomeNewsPhillips 66 to Build 300 MMcf/d Gas Processing Plant in Permian

Phillips 66 to Build 300 MMcf/d Gas Processing Plant in Permian

4/29/2025

By Mary Holcomb, Digital Editor

(P&GJ) — Phillips 66 plans to expand its midstream operations with the construction of a new gas processing facility in the Permian Basin, the company announced on April 25 alongside its first-quarter 2025 financial results.

The Iron Mesa gas plant, a 300 MMcf/d facility, will provide natural gas processing services for Delaware and Midland Basin production. Phillips 66 expects the plant to begin operations in the first quarter of 2027, further advancing its wellhead-to-market strategy amid ongoing growth in Permian output.

"The acquisition of EPIC NGL earlier this month and the announcement that we are constructing a new gas plant in the Permian furthers our integrated NGL wellhead-to-market strategy," Chairman and CEO Mark Lashier said. "This provides stable cash flow in uncertain market environments, enabling us to consistently return over 50% of net operating cash flow to shareholders."

The announcement comes as Phillips 66 reported a first-quarter adjusted loss of $368 million, or $0.90 per share, citing a challenging macro environment and extensive planned maintenance. Including special items, the company posted net earnings of $487 million, or $1.18 per share.

“Our results reflect not only a challenging macro environment, but also the impact from one of our largest-ever spring turnaround programs, managed safely, on-time and under budget," Lashier said. "With the bulk of our turnarounds behind us, we are well positioned to capture stronger margins as the year unfolds."

Beyond the Iron Mesa project, Phillips 66 also recently closed its acquisition of EPIC Y-Grade GP, LLC and EPIC Y-Grade LP, strengthening its integrated natural gas liquids (NGL) position.

On April 1, the company said it finalized its $2.2 billion acquisition of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, adding significant midstream infrastructure to its portfolio.

The acquired assets include two natural gas liquids (NGL) fractionators with a combined capacity of 170,000 barrels per day (bpd) near Corpus Christi, Texas; about 350 miles of purity product pipelines; and an 885-mile NGL pipeline transporting 175,000 bpd from the Delaware, Midland and Eagle Ford basins to the Gulf Coast.

“This transaction strengthens our position as a leading integrated downstream energy provider,” said Don Baldridge, executive vice president of Midstream & Chemicals. “Phillips 66 will offer producers unparalleled flow assurance, while advancing a strategy that is expected to deliver attractive returns and create long-term value for our shareholders.”

Phillips 66 returned $716 million to shareholders through dividends and share repurchases during the quarter and reported $1.5 billion in cash and cash equivalents as of March 31. Total debt fell by $1.3 billion to $18.8 billion. The company also completed a crude flexibility project at its Sweeny Refinery during the first-quarter maintenance window.

Looking ahead, Lashier emphasized that Phillips 66 remains committed to returning over 50% of net operating cash flow to shareholders, even amid volatile market conditions.

The Author

Mary Holcomb - Pipeline & Gas Journal,

Mary Holcomb is the Digital Editor & Operations Manager at Gulf Energy Information, overseeing the Pipeline & Gas Journal, World Oil, and Underground Infrastructure brands. With over 5 years of experience, she drives digital content strategy and operations for these industry-leading publications.

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