2019

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended	December 31, 2019
	OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35349

Phillips 66

(Exact name of registrant as specified in its charter)

Delaware	45-3779385
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2331 CityWest Blvd., Houston, Texas 77042

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: 281-293-6600

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	PSX	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.								☒	Yes	☐	No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.								☐	Yes	☒	No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.								☒	Yes	☐	No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).								☒	Yes	☐	No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.								☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).								☐	Yes	☒	No

The aggregate market value of common stock held by non-affiliates of the registrant on June 28, 2019, the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing price on that date of $93.54, was $41.9 billion. The registrant, solely for the purpose of this required presentation, had deemed its Board of Directors and executive officers to be affiliates, and deducted their stockholdings in determining the aggregate market value.

The registrant had 439,445,842 shares of common stock outstanding at January 31, 2020.

Documents incorporated by reference:

Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held on May 6, 2020 (Part III).

TABLE OF CONTENTS
Item	Page
PART I
1 and 2. Business and Properties	1
Corporate Structure	1
Segment and Geographic Information	2
Midstream	2
Chemicals	10
Refining	12
Marketing and Specialties	16
Research and Development	17
Competition	18
General	18
1A. Risk Factors	19
1B. Unresolved Staff Comments	27
3. Legal Proceedings	28
4. Mine Safety Disclosures	28
Information About Our Executive Officers	29
PART II
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	30
6. Selected Financial Data	32
7. Management's Discussion and Analysis of Financial Condition and Results of Operations	33
7A. Quantitative and Qualitative Disclosures About Market Risk	70
Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995	72
8. Financial Statements and Supplementary Data	73
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	147
9A. Controls and Procedures	147
9B. Other Information	147
PART III
10. Directors, Executive Officers and Corporate Governance	148
11. Executive Compensation	148
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	148
13. Certain Relationships and Related Transactions, and Director Independence	148
14. Principal Accounting Fees and Services	148
PART IV
15. Exhibits, Financial Statement Schedules	149
16. Form 10-K Summary	149
Signatures	154

Unless otherwise indicated, “the company,” “we,” “our,” “us” and “Phillips 66” are used in this report to refer to the businesses of Phillips 66 and its consolidated subsidiaries.

This Annual Report on Form 10-K contains forward-looking statements including, without limitation, statements relating to our plans, strategies, objectives, expectations and intentions that are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions identify forward-looking statements. The company does not undertake to update, revise or correct any forward-looking information unless required to do so under the federal securities laws. Readers are cautioned that such forward-looking statements should be read in conjunction with the company’s disclosures under the heading “CAUTIONARY STATEMENT FOR THE PURPOSES OF THE ‘SAFE HARBOR’ PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.”

PART I

Items 1 and 2. BUSINESS AND PROPERTIES

CORPORATE STRUCTURE

Phillips 66, headquartered in Houston, Texas, was incorporated in Delaware in 2011 in connection with, and in anticipation of, a restructuring of ConocoPhillips that separated its downstream businesses into an independent, publicly traded company named Phillips 66. The two companies were separated by ConocoPhillips distributing to its stockholders all the shares of common stock of Phillips 66 after the market closed on April 30, 2012 (the Separation). Phillips 66 stock trades on the New York Stock Exchange under the “PSX” stock symbol.

Our business is organized into four operating segments:

1) Midstream—Provides crude oil and refined petroleum product transportation, terminaling and processing services, as well as natural gas and natural gas liquids (NGL) transportation, storage, fractionation, processing and marketing services, mainly in the United States. This segment includes our master limited partnership (MLP), Phillips 66 Partners LP (Phillips 66 Partners), as well as our 50% equity investment in DCP Midstream, LLC (DCP Midstream).

2) Chemicals—Consists of our 50% equity investment in Chevron Phillips Chemical Company LLC (CPChem), which manufactures and markets petrochemicals and plastics on a worldwide basis.

3) Refining—Refines crude oil and other feedstocks into petroleum products, such as gasoline, distillates and aviation fuels, at 13 refineries in the United States and Europe.

4) Marketing and Specialties (M&S)—Purchases for resale and markets refined petroleum products, mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of specialty products, such as base oils and lubricants.

Corporate and Other includes general corporate overhead, interest expense, our investment in new technologies and various other corporate activities. Corporate assets include all cash, cash equivalents and income tax-related assets.

At December 31, 2019, Phillips 66 had approximately 14,500 employees.

1

SEGMENT AND GEOGRAPHIC INFORMATION

MIDSTREAM

The Midstream segment consists of three business lines:

• Transportation—Transports crude oil and other feedstocks to our refineries and other locations, delivers refined petroleum products to market, and provides terminaling and storage services for crude oil and refined petroleum products.

• NGL and Other—Transports, stores, fractionates, exports and markets NGL and provides other fee-based processing services.

• DCP Midstream—Gathers, processes, transports and markets natural gas and transports, fractionates and markets NGL.

Phillips 66 Partners

Phillips 66 Partners, headquartered in Houston, Texas, is a publicly traded MLP formed in 2013 to own, operate, develop and acquire primarily fee-based midstream assets. On August 1, 2019, Phillips 66 Partners completed a restructuring transaction to eliminate the incentive distribution rights (IDRs) held by us and convert our 2% economic general partner interest into a noneconomic general partner interest in exchange for 101 million Phillips 66 Partners common units. No distributions were made for the general partner interest after August 1, 2019. At December 31, 2019, we owned 170 million Phillips 66 Partners common units, representing a 74% limited partner interest in Phillips 66 Partners, while the public owned a 26% limited partner interest and 13.8 million perpetual convertible preferred units.

Phillips 66 Partners’ operations currently consist of crude oil, refined petroleum product and NGL transportation, terminaling, fractionation, processing and storage assets that are geographically dispersed throughout the United States. The majority of Phillips 66 Partners’ assets are associated with, and integral to, Phillips 66 operated refineries.

The results of operations of Phillips 66 Partners are included in Midstream’s Transportation and NGL and Other business lines, based on the nature of the activity within the partnership.

Transportation

We own or lease various assets to provide transportation, terminaling and storage services. These assets include crude oil, refined petroleum product, NGL, and natural gas pipeline systems; crude oil, refined petroleum product and NGL terminals; a petroleum coke handling facility; marine vessels; railcars and trucks.

Pipelines and Terminals

At December 31, 2019, our Transportation business was comprised of over 22,000 miles of crude oil, refined petroleum product, NGL and natural gas pipeline systems in the United States, including those partially owned or operated by our affiliates. We owned or operated 39 refined petroleum product terminals, 20 crude oil terminals, 4 NGL terminals, a petroleum coke exporting facility and various other storage and loading facilities.

The Beaumont Terminal in Nederland, Texas, is the largest terminal in the Phillips 66 portfolio. At December 31, 2019, the terminal storage capacity was 15.5 million barrels, which included 11.8 million barrels of storage capacity for crude oil and 3.7 million barrels of storage capacity for refined petroleum products. We continue to expand capacity at the Beaumont Terminal, and upon completion in the first quarter of 2020, the terminal will have 16.8 million barrels of total crude oil and refined products storage capacity. In addition, we are increasing its export capacity by 200,000 barrels per day (BPD) with the addition of a fourth dock, bringing the terminal’s total dock capacity to 800,000 BPD. The project is expected to be completed in the third quarter of 2020.

2

The Bayou Bridge Pipeline joint venture transports crude oil from Nederland, Texas, to St. James, Louisiana. A segment of the pipeline from Lake Charles to St. James, Louisiana, was completed on April 1, 2019. Phillips 66 Partners has a 40% interest in the joint venture, and our co-venturer serves as the operator. The pipeline has a capacity of approximately 480,000 BPD.

The Gray Oak Pipeline system will transport up to 900,000 BPD of crude oil from the Permian and Eagle Ford to Texas Gulf Coast destinations that include Corpus Christi, the Sweeny area, including our Sweeny Refinery, as well as access to the Houston market.  The pipeline system made its first commercial delivery in November 2019 and is expected to reach full service in the second quarter of 2020. Phillips 66 Partners has a 42.25% effective ownership interest in the pipeline system.

Phillips 66 Partners owns a 25% interest in the South Texas Gateway Terminal, which will connect to the Gray Oak Pipeline in Corpus Christi, Texas. The marine export terminal, under construction by a co-venturer, will have two deepwater docks, storage capacity of 8.5 million barrels and up to 800,000 BPD of throughput capacity. The terminal is expected to start up in the third quarter of 2020.

The Red Oak Pipeline system joint venture will transport crude oil from Cushing, Oklahoma, and the Permian to multiple destinations along the Texas Gulf Coast, including Corpus Christi, Ingleside, Houston, and Beaumont, Texas. The throughput capacity on the pipeline is expected to be 1,000,000 BPD. The pipeline system is supported by long-term shipper commitments, and initial service is expected in the first half of 2021. Our co-venturer will construct the pipeline, and we will operate it. We own a 50% interest in the joint venture.

The Liberty Pipeline joint venture will transport crude oil from the Rockies and Bakken production areas to Cushing, Oklahoma. The throughput capacity on the 24 inch pipeline is expected to be 400,000 BPD. The pipeline is supported by long-term shipper commitments, and service is expected in the first half of 2021. We will construct and operate the pipeline. We own a 50% interest in the joint venture.

3

The following table depicts our ownership interest in major pipeline systems at December 31, 2019:

Name	State of Origination/Terminus	Interest		Length (Miles)	Gross Capacity (MBD)
Crude Oil
Bakken Pipeline †	North Dakota/Texas	25	%	1,918	570
Bayou Bridge †	Texas/Louisiana	40		213	480
Clifton Ridge †	Louisiana	100		10	260
CushPo †	Oklahoma	100		62	130
Eagle Ford Gathering †	Texas	100		28	54
Glacier †	Montana	79		865	126
Gray Oak Pipeline* †	Texas	42		840	235
Line 100	California	100		79	54
Line 200	California	100		228	93
Line 300	California	100		61	48
Line 400	California	100		153	40
Line O †	Oklahoma/Texas	100		276	37
New Mexico Crude †	New Mexico/Texas	100		227	106
North Texas Crude †	Texas	100		224	28
Oklahoma Crude †	Texas/Oklahoma	100		217	100
Sacagawea †	North Dakota	50		95	175
STACK PL †	Oklahoma	50		149	250
Sweeny Crude	Texas	100		56	265
West Texas Crude †	Texas	100		1,079	156
Refined Petroleum Products
ATA Line †	Texas/New Mexico	50		293	34
Borger to Amarillo †	Texas	100		93	76
Borger-Denver	Texas/Colorado	70		397	38
Cherokee East †	Oklahoma/Missouri	100		287	55
Cherokee North †	Oklahoma/Kansas	100		29	57
Cherokee South †	Oklahoma	100		98	46
Cross Channel Connector †	Texas	100		5	184
Explorer †	Texas/Indiana	22		1,830	660
Gold Line †	Texas/Illinois	100		686	120
Heartland**	Kansas/Iowa	50		49	30
LAX Jet Line	California	50		19	50
Los Angeles Products	California	100		22	112
Paola Products †	Kansas	100		106	96
Pioneer	Wyoming/Utah	50		562	63
Richmond	California	100		14	26
SAAL †	Texas	33		102	32
SAAL †	Texas	54		19	30
Seminoe †	Montana/Wyoming	100		342	33
Standish †	Oklahoma/Kansas	100		92	72
Sweeny to Pasadena †	Texas	100		120	294
Torrance Products	California	100		8	161
Watson Products	California	100		9	238
Yellowstone	Montana/Washington	46		710	66

4

Name	State of Origination/Terminus	Interest		Length (Miles)	Gross Capacity (MBD)
NGL
Blue Line	Texas/Illinois	100	%	688	29
Brown Line †	Oklahoma/Kansas	100		76	26
Chisholm	Oklahoma/Kansas	50		202	42
Conway to Wichita	Kansas	100		55	38
Medford †	Oklahoma	100		42	10
Powder River	Wyoming/Texas	100		716	14
River Parish NGL †	Louisiana	100		510	133
Sand Hills †	New Mexico/Texas	33		1,506	500
Skelly-Belvieu	Texas	50		571	45
Southern Hills †	Kansas/Texas	33		981	192
Sweeny LPG	Texas	100		232	942
Sweeny NGL	Texas	100		18	204
TX Panhandle Y1/Y2	Texas	100		289	61
Natural Gas
Rockies Express***
East to West	Ohio/Illinois	25		661	2.6 Bcf/d
West to East	Colorado/Ohio	25		1,712	1.8 Bcf/d

† Owned by Phillips 66 Partners; Phillips 66 held 74% of the limited partner interest in Phillips 66 Partners at December 31, 2019.

* Interest reflects Phillips 66 Partners’ proportionate share of the Gray Oak Pipeline system, held through its 65 percent-owned consolidated subsidiary, Gray Oak Holdings, LLC. Gray Oak Holdings, LLC had a 65% ownership interest in Gray Oak Pipeline, LLC at December 31, 2019. Gross capacity reflects the initial accelerated commissioning service capacity at December 31, 2019.

** Total pipeline system is 419 miles. Phillips 66 has an ownership interest in multiple segments totaling 49 miles.

*** Total pipeline system consists of three zones for a total of 1,712 miles. The third zone of the pipeline is bidirectional and can transport 2.6 Bcf/d of natural gas from east to west.

5

The following table depicts our ownership interest in terminal and storage facilities at December 31, 2019:

Facility Name	Location	Commodity Handled	Interest		Gross Storage Capacity (MBbl)	Gross Rack Capacity (MBD)
Albuquerque †	New Mexico	Refined Petroleum Products	100	%	274	20
Amarillo †	Texas	Refined Petroleum Products	100		296	23
Beaumont	Texas	Crude Oil, Refined Petroleum Products	100		15,500	8
Billings	Montana	Refined Petroleum Products	100		88	12
Billings Crude †	Montana	Crude Oil	100		236	N/A
Borger	Texas	Crude Oil	50		772	N/A
Bozeman	Montana	Refined Petroleum Products	100		130	5
Buffalo Crude †	Montana	Crude Oil	100		303	N/A
Casper †	Wyoming	Refined Petroleum Products	100		365	7
Clemens †	Texas	NGL	100		9,000	N/A
Clifton Ridge †	Louisiana	Crude Oil	100		3,800	N/A
Coalinga	California	Crude Oil	100		817	N/A
Colton	California	Refined Petroleum Products	100		207	20
Cushing †	Oklahoma	Crude Oil	100		675	N/A
Cut Bank †	Montana	Crude Oil	100		315	N/A
Denver	Colorado	Refined Petroleum Products	100		310	43
Des Moines	Iowa	Refined Petroleum Products	50		217	12
East St. Louis †	Illinois	Refined Petroleum Products	100		2,031	62
Freeport	Texas	Crude Oil, Refined Petroleum Products, NGL	100		3,485	N/A
Glenpool †	Oklahoma	Refined Petroleum Products	100		571	18
Great Falls	Montana	Refined Petroleum Products	100		198	6
Hartford †	Illinois	Refined Petroleum Products	100		1,468	21
Helena	Montana	Refined Petroleum Products	100		195	5
Jefferson City †	Missouri	Refined Petroleum Products	100		103	15
Jones Creek	Texas	Crude Oil	100		2,580	N/A
Junction	California	Crude Oil, Refined Petroleum Products	100		524	N/A
Kansas City †	Kansas	Refined Petroleum Products	100		1,410	50
Keene †	North Dakota	Crude Oil	50		503	N/A
La Junta	Colorado	Refined Petroleum Products	100		109	5
Lake Charles Pipeline Storage	Louisiana	Refined Petroleum Products	50		3,143	N/A
Lincoln	Nebraska	Refined Petroleum Products	100		217	12
Linden †	New Jersey	Refined Petroleum Products	100		360	95
Los Angeles	California	Refined Petroleum Products	100		156	80
Lubbock †	Texas	Refined Petroleum Products	100		182	18
Medford Spheres †	Oklahoma	NGL	100		70	N/A
Missoula	Montana	Refined Petroleum Products	50		365	14
Moses Lake	Washington	Refined Petroleum Products	50		216	10
Mount Vernon †	Missouri	Refined Petroleum Products	100		365	40
North Salt Lake	Utah	Refined Petroleum Products	50		755	34
North Spokane	Washington	Refined Petroleum Products	100		492	N/A
Odessa †	Texas	Crude Oil	100		521	N/A
Oklahoma City †	Oklahoma	Crude Oil, Refined Petroleum Products	100		355	42

6

Facility Name	Location	Commodity Handled	Interest		Gross Storage Capacity (MBbl)	Gross Rack Capacity (MBD)
Palermo †	North Dakota	Crude Oil	70	%	235	N/A
Paola †	Kansas	Refined Petroleum Products	100		978	N/A
Pasadena †	Texas	Refined Petroleum Products	100		3,234	65
Pecan Grove †	Louisiana	Crude Oil	100		177	N/A
Ponca City †	Oklahoma	Refined Petroleum Products	100		71	22
Ponca City Crude †	Oklahoma	Crude Oil	100		1,229	N/A
Portland	Oregon	Refined Petroleum Products	100		650	33
Renton	Washington	Refined Petroleum Products	100		243	19
Richmond	California	Refined Petroleum Products	100		343	28
River Parish †	Louisiana	NGL	100		1,500	N/A
Rock Springs	Wyoming	Refined Petroleum Products	100		132	8
Sacramento	California	Refined Petroleum Products	100		146	12
San Bernard	Texas	Refined Petroleum Products	100		222	N/A
Santa Margarita	California	Crude Oil	100		398	N/A
Sheridan †	Wyoming	Refined Petroleum Products	100		94	6
Spokane	Washington	Refined Petroleum Products	100		351	20
Tacoma	Washington	Refined Petroleum Products	100		316	19
Torrance	California	Crude Oil, Refined Petroleum Products	100		2,128	N/A
Tremley Point †	New Jersey	Refined Petroleum Products	100		1,701	25
Westlake	Louisiana	Refined Petroleum Products	100		128	10
Wichita Falls †	Texas	Crude Oil	100		225	N/A
Wichita North †	Kansas	Refined Petroleum Products	100		769	20
Wichita South †	Kansas	Refined Petroleum Products	100		272	N/A

† Owned by Phillips 66 Partners; Phillips 66 held 74% of the limited partner interest in Phillips 66 Partners at December 31, 2019.

The following table depicts our ownership interest in marine, rail and petroleum coke loading and offloading facilities at December 31, 2019:

Facility Name	Location	Commodity Handled	Interest		Gross Loading Capacity*
Marine
Beaumont	Texas	Crude Oil, Refined Petroleum Products	100	%	60
Clifton Ridge †	Louisiana	Crude Oil, Refined Petroleum Products	100		50
Freeport	Texas	Crude Oil, Refined Petroleum Products, NGL	100		46
Hartford †	Illinois	Refined Petroleum Products	100		3
Pecan Grove †	Louisiana	Crude Oil	100		6
Portland	Oregon	Crude Oil	100		10
Richmond	California	Crude Oil	100		3
San Bernard	Texas	Refined Petroleum Products	100		2
Tacoma	Washington	Crude Oil	100		12
Tremley Point †	New Jersey	Refined Petroleum Products	100		7
Rail
Bayway †	New Jersey	Crude Oil	100		75
Beaumont	Texas	Crude Oil	100		20
Ferndale †	Washington	Crude Oil	100		30
Missoula	Montana	Refined Petroleum Products	50		41
Palermo †	North Dakota	Crude Oil	70		100
Thompson Falls	Montana	Refined Petroleum Products	50		41
Petroleum Coke
Lake Charles	Louisiana	Petroleum Coke	50		N/A

† Owned by Phillips 66 Partners; Phillips 66 held 74% of the limited partner interest in Phillips 66 Partners at December 31, 2019.

* Marine facilities in thousands of barrels per hour; Rail in thousands of barrels daily (MBD).

7

Marine Vessels

At December 31, 2019, we had 17 international-flagged crude oil, refined petroleum product and NGL tankers and two Jones Act-compliant tankers under time charter contracts, with capacities ranging in size from 300,000 to 2,200,000 barrels.  Additionally, we had a variety of inland and offshore tug/barge units.  These vessels are used primarily to transport crude oil and other feedstocks, as well as refined petroleum products for certain of our refineries.  In addition, the NGL tankers are used to export propane and butane from our fractionation, transportation and storage infrastructure.

Truck and Rail

Our truck and rail fleets support our feedstock and distribution operations. Rail movements are provided via a fleet of approximately 10,000 owned and leased railcars. Truck movements are provided through our wholly owned subsidiary, Sentinel Transportation LLC, and through numerous third-party trucking companies.

NGL and Other

Our NGL and Other business includes the following:

• A U.S. Gulf Coast NGL market hub comprised of the Freeport LPG Export Terminal and Phillips 66 Partners’ 100,000-BPD Sweeny Fractionator. These assets are supported by 9,000,000 barrels of gross capacity at Phillips 66 Partners’ Clemens Caverns storage facility. We refer to these facilities as the “Sweeny Hub.”

• A 22.5% interest in Gulf Coast Fractionators, which owns an NGL fractionation plant in Mont Belvieu, Texas. We operate the facility, and our net share of its capacity is 32,625 BPD.

• A 12.5% undivided interest in a fractionation plant in Mont Belvieu, Texas. Our net share of its capacity is 30,250 BPD.

• A 40% undivided interest in a fractionation plant in Conway, Kansas. Our net share of its capacity is 43,200 BPD.

• Phillips 66 Partners owns the River Parish NGL logistics system in southeast Louisiana, comprising approximately 500 miles of pipeline and a storage cavern connecting multiple fractionation facilities, refineries and a petrochemical facility.

• Phillips 66 Partners owns a direct one-third interest in both the DCP Sand Hills Pipeline, LLC (Sand Hills) and DCP Southern Hills Pipeline, LLC, which own NGL pipeline systems that connect the Eagle Ford, Permian Basin and Midcontinent production areas to the Mont Belvieu, Texas, market hub.

• Phillips 66 Partners, through its ownership of Merey Sweeny LLC, owns a vacuum distillation unit with a capacity of 125,000 BPD and a delayed coker unit with a capacity of 70,000 BPD located at our Sweeny Refinery in Old Ocean, Texas.

• In July 2019, Phillips 66 Partners completed the construction of a 25,000 BPD isomerization unit at our Lake Charles Refinery, which reached full production during the year. The project increased Phillips 66’s production of higher-octane gasoline blend components.

Phillips 66 Partners’ Sweeny Fractionator is located adjacent to our Sweeny Refinery in Old Ocean, Texas, and supplies purity ethane to the petrochemical industry and purity NGL to domestic and global markets. Raw NGL supply to the fractionator is delivered from nearby major pipelines, including the Sand Hills Pipeline. The fractionator is supported by significant infrastructure including connectivity to two NGL supply pipelines, a pipeline connecting to the Mont Belvieu market center and the Clemens Caverns storage facility with access to our liquefied petroleum gas (LPG) export terminal in Freeport, Texas.

8