Phillips 66 is advancing its wellhead-to-market strategy with the announcement of the Iron Mesa gas plant, a 300 million cubic feet per day (MMcf/d) facility slated to begin operations in early 2027. Located in Ector County, Texas, near the company’s existing Goldsmith plant, Iron Mesa will provide natural gas processing services for production from both the Delaware and Midland basins. Company executives emphasized that the plant will be a key component of Phillips 66’s growing NGL network, with connections to the Sand Hills NGL system and integration alongside its Dos Picos and Dos Picos II plants.
During the company’s first-quarter earnings call, Phillips 66 Chairman and CEO Mark Lashier noted that the plant – combined with the recently completed acquisition of EPIC NGL – will strengthen the company’s ability to deliver stable, fee-based cash flows even in volatile markets. Lashier said this integrated approach allows Phillips 66 to consistently return over 50% of its net operating cash flow to shareholders. The project is expected to support the company’s target of reaching $4.5 billion in midstream adjusted EBITDA by 2027.
Don Baldridge, executive vice-president of Midstream & Chemicals, said Iron Mesa illustrates the company’s continued progress in building out its NGL value chain. He noted that the facility will support both gathering and processing growth in the Permian and provide producers with greater flow assurance. Upgrades and strategic retirements of older assets are planned as part of the construction, enhancing system efficiency and connectivity.
The Iron Mesa announcement comes as Phillips 66 reported a challenging first quarter, posting an adjusted loss of $368 million, despite net earnings of $487 million including special items. The company attributed the loss to one of its largest-ever spring maintenance programs, which included work at the Sweeny Refinery that now allows switching between heavy and light crude feedstocks. The quarter also saw a $246 million pre-tax depreciation charge related to the planned closure of the Los Angeles refinery.
Despite the earnings volatility, Phillips 66 continued to return capital to shareholders, distributing $716 million through dividends and share repurchases. With the EPIC NGL acquisition finalized in April, the company added two fractionators near Corpus Christi, over 1,200 miles of pipelines, and enhanced takeaway capacity from the Permian Basin.
