At an analyst and investor presentation
today, Marathon Petroleum Corp. MPC announced its 2016 capital
investment plan of $4.2 billion. The plan includes $1.5 billion for
MPC's refining and marketing segment; nearly $400 million for Speedway,
MPC's retail subsidiary; and $2.2 billion for MPC's pipeline
transportation segment, which includes $1.7 billion for MPLX LP MPLX.
"We continue to focus on investing in our more stable cash-flow
generating midstream and Speedway businesses, as well as pursuing
margin-enhancing projects in our core refining and marketing business,"
said Gary R. Heminger, MPC president and chief executive officer. "Our
capital allocation will enable us to continue executing on this
commitment and drive long-term value for our investors."
The refining and marketing segment's capital plan of $1.5 billion
includes approximately $350 million for midstream investments,
approximately $475 million for margin-enhancing projects and
approximately $675 million for refinery sustaining capital. One of the
capital projects for the refining and marketing segment is the South
Texas Asset Repositioning (STAR) program at MPC facilities in Texas City,
Texas. "The STAR program represents an approximate $2 billion investment
through 2020 that will fully integrate our Galveston Bay and Texas City
refineries, increase our overall crude processing capacity, increase our
distillate and gas oil recovery and improve the refinery's reliability,"
said Heminger. "It will create a world-class refining complex with a
crude processing capacity of 585,000 barrels per day, making it the
second-largest U.S. refinery."
Speedway's nearly $400 million capital budget is focused on store
remodels, particularly remodels of its recently converted stores along
the East Coast, and building new locations in Speedway's core markets.
The $2.2 billion of capital allocated to MPC's pipeline transportation
segment includes $1.7 billion for MPLX. The largest component of the
MPLX investment plan, over $1.2 billion, is attributed to MarkWest's
ongoing development of natural gas and gas liquids infrastructure to
support its producer customers throughout the Southwest and Northeast
regions, particularly in the Marcellus and Utica shales.
MPLX continues its development of the Cornerstone pipeline project in
eastern Ohio and is further expanding its Utica shale build-out
associated with this project. MPC also continues its capital focus to
expand its inventory of assets that could be dropped down to MPLX to
support its targeted growth profile over the next several years.
Heminger said the addition of MarkWest substantially expands the
companies' opportunity set across the hydrocarbon value chain. "Together,
MPC, MPLX and MarkWest see significant future incremental opportunities
that will capitalize on their respective expertise to capture commercial
synergies and drive value for the investors in both businesses," he
said.
"Both MPC and MPLX have sustainable competitive advantages through our
fully integrated system, which gives us tremendous flexibility to meet
market needs," said Heminger. "Our assets are strategically located, and
our continuing investments are focused on achieving consistent long-term
performance for our investors."
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