19 Jan

ANDX, PSXP: Analyzing Trends in Capital Expenditures

WRITTEN BY Rekha Khandelwal, CFA

PSXP’s capital expenditures

Phillips 66 Partners (PSXP) spent $97.0 million on growth projects in 3Q17. The company spent $225.0 million on growth projects in the first nine months of 2017.

In October 2017, Phillips 66 Partners acquired from its sponsor, Phillips 66 (PSX), a 25.0% interest in the Bakken Pipeline system and a 100.0% interest in the coke processing units at PSX’s Sweeny Refinery. The total value of the transaction was $2.4 billion.

ANDX, PSXP: Analyzing Trends in Capital Expenditures

The chart above compares the capital expenditures of Phillips 66 Partners, Holly Energy Partners (HEP), Andeavor Logistics (ANDX), and PBF Logistics (PBFX) over the last five quarters.

HEP’s capital expenditures

Holly Energy Partners’ capital expenditures for the third quarter of 2017 was ~$10.0 million. The company expects to spend $40.0 million–$50.0 million of capital on growth projects in 2017.

ANDX‘s capital expenditures

During 3Q17, Andeavor Logistics’ capital expenditures totaled $51.0 million. For 2017, the company expects its capex to be ~$200.0 million. In October 2017, Andeavor Logistics completed the $1.7 billion acquisition of Western Refining Logistics.

Andeavor Logistics expects to invest nearly $1.0 billion annually in growth investments from 2018 to 2020. This is expected to include at least $500.0 million–$600.0 million in organic growth and acquisitions and $400.0 million–$500.0 million in dropdowns from its parent, Andeavor (ANDV).

PBFX’s capital expenditures

PBF Logistics’ capital expenditures stood at $15.1 million in 3Q17. PBFX completed the Paulsboro natural gas pipeline in August 2017 and the Chalmette storage tank project in October. Both projects are expected to increase PBFX’s EBITDA by ~$12.0 million in 4Q17.

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