Phillips 66 (PSX) is putting serious money to work. The energy giant rolled out its 2026 capital spending plan on Monday, setting aside $2.4 billion for a mix of keeping the lights on and building for the future.

The breakdown tells you where management sees opportunity: $1.1 billion goes toward sustaining current operations, while $1.3 billion gets funneled into growth projects. That's a company comfortable enough with its base business to bet big on expansion.

"The 2026 capital budget reflects our ongoing commitment to capital discipline and maximizing shareholder returns. We are investing growth capital in our NGL value chain and high-return Refining projects, while also investing sustaining capital to support safe and reliable operations," said Mark Lashier, chairman and CEO of Phillips 66.

Where the Money Goes

The Midstream segment claims the biggest piece of the pie at $1.1 billion total. Of that, $400 million covers sustaining investments while $700 million targets growth opportunities.

Those growth dollars support what Phillips 66 calls its "integrated NGL wellhead-to-market strategy," which is industry speak for controlling natural gas liquids from extraction through processing, transportation, and final sale. The company is expanding gas processing facilities, pipeline infrastructure, and fractionation capacity across key producing regions.

Refining gets a matching $1.1 billion allocation, though the split looks different: $590 million for sustaining capital and $520 million for growth initiatives. These high-return refining projects suggest management sees continued strength in margins.

Then there's the CPChem joint venture, which receives $680 million in fully self-funded investment. The allocation breaks down to $200 million for sustaining operations and $480 million for growth.

That growth capital supports world-scale petrochemical facilities along the U.S. Gulf Coast and in Ras Laffan, Qatar, with startup dates anticipated in 2026 and early 2027. These aren't small bets—world-scale facilities represent major capacity additions.

Strategic Portfolio Moves

Earlier this month, Phillips 66 wrapped up a significant portfolio restructuring in Europe. The company sold a 65% stake in its Germany and Austria retail marketing business to a consortium involving subsidiaries of Energy Equation Partners and Stonepeak for roughly 2.5 billion euros, or about $2.8 billion.

Phillips 66 kept a 35% non-operated interest in the newly formed joint venture and pocketed around 1.5 billion euros, approximately $1.6 billion, in pre-tax proceeds at closing. That's fresh capital that could support these announced investment plans while maintaining exposure to European retail markets.

Shares of Phillips 66 traded down 0.52% at $140.70 on Monday following the announcement.