finance
Phillips 66 and Kinder Morgan Secure Shipper Commitments for Proposed Western Gateway Pipeline
Phillips 66 and Kinder Morgan announced they have obtained sufficient long-term shipper commitments to proceed with the Western Gateway Pipeline project. The pipeline aims to connect Midwest and Gulf Coast fuel supplies to Arizona and California markets. It comes amid refinery closures that have reduced California's refining capacity by nearly 20%.
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Phillips 66 and Kinder Morgan announced on Monday that they have secured enough long-term shipper commitments to advance the proposed Western Gateway Pipeline. The pipeline will connect Midwest and Gulf Coast refinery supply to Phoenix, Arizona, and California markets, with connectivity to Las Vegas, Nevada, via Kinder Morgan’s CALNEV pipeline.
It will consist of a new pipeline from Borger, Texas, to Phoenix, Arizona, and include Kinder Morgan’s existing SFPP pipeline from Colton, California, to Phoenix, Arizona, which will be reversed to enable east-to-west product flows into California.
The Western Gateway Pipeline will be fed by Midwest and Gulf Coast supplies connected to Borger, Texas. The Gold Pipeline, operated by Phillips 66, currently flows from Borger to St. Louis and will be reversed to enable refined products from Midwest and Gulf Coast refineries to flow toward Borger.
The project is targeting an in-service date of mid-2029. com reported that the announcement follows refinery closures in California. Phillips 66's Los Angeles plant began winding down operations in September.
Valero Energy’s Benicia refinery plans to close this month. The closure of Phillips 66's Los Angeles plant and Valero Energy’s Benicia refinery together account for nearly 20% of California’s refining capacity. California’s market is almost entirely dependent on fuel brought in by tanker plus in-state supplies.
According to the Energy Information Administration, no pipelines carry fuel to California across the Rocky Mountains. Only a few pipelines carry fuel from the Gulf Coast to the West Coast. 02 per gallon, according to AAA.
