Phillips 66, Kinder Morgan and HF Sinclair have reached a final investment decision (FID) and finalized their joint venture for the $5 billion Western Gateway Pipeline, advancing one of the largest proposed refined-products pipeline projects in the United States. The approximately 1,300-mile system is designed to move up to 230,000 barrels per day of gasoline, diesel and other refined products from Midcontinent and Gulf Coast supply points into Arizona and California.
The centerpiece of the project is approximately 900 miles of new 20-inch and 24-inch pipeline between Borger, Texas, and Phoenix, Arizona. Phillips 66 will construct and operate the new segment. Kinder Morgan will integrate its existing SFPP East Line, connecting El Paso with Phoenix and Tucson, and reverse its SFPP West Line to enable east-to-west transportation from Phoenix to Colton, California. Phillips 66 also plans to reverse its Gold Pipeline to move products toward Borger and establish connectivity with the Explorer Pipeline.
Ownership of Western Gateway will be split between Phillips 66 at 49.9%, Kinder Morgan at 35.1% and HF Sinclair at 15%. Phillips 66 is expected to contribute $2.5 billion in cash, while HF Sinclair will contribute $750 million and Kinder Morgan $250 million. After completion of the Borger-to-Phoenix pipeline, Kinder Morgan will contribute its SFPP East and West Line assets to the venture at an estimated value of $1.5 billion. The project is primarily supported by 10-year take-or-pay contracts.
Western Gateway is targeted for completion in 2029, subject to required permits and regulatory approvals. For pipeline contractors, equipment manufacturers and suppliers, the 900-mile new-build portion represents a significant multi-year infrastructure project, while modifications to existing pipeline systems will add additional project requirements.
Industry Impact
Western Gateway would create a new refined-products corridor linking major Midcontinent and Gulf Coast supply with western U.S. markets. The $5 billion investment, integration of existing infrastructure and substantial new pipeline construction could strengthen fuel transportation capacity while generating significant demand for pipeline construction, materials, equipment and related services.
Two-Sentence Summary
Phillips 66, Kinder Morgan and HF Sinclair have approved the $5 billion Western Gateway Pipeline, a 1,300-mile system designed to transport up to 230,000 barrels per day of refined products to western U.S. markets. The project includes approximately 900 miles of new pipeline from Borger, Texas, to Phoenix, Arizona, with completion targeted for 2029.
Author: phinds