Phillips 66 Co. is charging ahead with its strategy to enhance midstream performance and integrated growth, announcing major new developments during its Q1 2025 earnings call on April 25.
As part of its broader NGL wellhead-to-market strategy, the company has taken Final Investment Decision (FID) on a new project: the Iron Mesa gas processing plant, a 300-MMcfd facility to be built in Ector County, Texas, near the existing Goldsmith gas plant northwest of Odessa.
Key project highlights:
- Iron Mesa is expected to start up in Q1 2027.
- It will gather and process natural gas from both the Midland and Delaware basins.
- It will complement and upgrade the aging Goldsmith plant by retiring older units and boosting processing efficiency.
- The project aims to enhance reliability and improve Phillips 66’s cost structure in the Permian.
- Funding for Iron Mesa will come within the existing corporate budget, according to CEO Mark Lasher.
Alongside this announcement, Phillips 66 confirmed that it remains on schedule to commission its Dos Picos II gas processing plant in Midland County, Texas, by the third quarter of 2025.
- Dos Picos II, with a 220-MMcfd capacity, is a key part of Phillips 66’s 2024 acquisition of Pinnacle Midland Parent LLC.
- Once operational, the Dos Picos complex will boast 440-MMcfd total processing capacity across its two plants.
Leadership Comments:
- Don Baldridge, EVP of Midstream and Chemicals: “The addition of Iron Mesa and upgrades at Goldsmith will enhance operational efficiencies and reliability, improving our overall cost structure in the Permian.”
- Mark Lasher, CEO: “Our Dos Picos II expansion plant, which was part of our Pinnacle acquisition strategy, is expected to come online in the third quarter of 2025.”
Strategic Context:
Phillips 66’s recent moves underscore its commitment to securing low-cost, high-efficiency midstream assets to support continued growth in the Permian Basin. With Iron Mesa and Dos Picos II, the company is strengthening its natural gas processing capabilities at a time when Permian production remains resilient, despite commodity price volatility.
