OREANDA-NEWS. At an analyst and investor presentation today, Marathon Petroleum Corp. (NYSE: 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 (NYSE: 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."