Phillips 66, Kinder Morgan and HF Sinclair have made a final investment decision to proceed with the $5 billion Western Gateway Pipeline, a 1,300-mile refined-products system designed to transport fuel from the Midwest and Gulf Coast to Arizona and California. The companies announced August 11 that they had finalized a joint venture agreement for the project. Phillips 66 will own 49.9% of the system, Kinder Morgan 35.1% and HF Sinclair 15%.
The project is a significant private-sector response to the loss of nearly one-fifth of California’s oil refining capacity. It would establish a direct pipeline connection between California and major U.S. refining centers, potentially reducing the state’s growing dependence on waterborne fuel imports.
Western Gateway would have an initial capacity of approximately 230,000 barrels per day and is being designed to accommodate future expansion without requiring additional pipeline construction. The companies are targeting completion in 2029.
New route would connect California to U.S. refining centers
Western Gateway would combine approximately 900 miles of new pipeline with existing infrastructure owned by Phillips 66 and Kinder Morgan.
The pipeline system would require Phillips 66 to build a new Western Gateway Pipeline, which would flow from Borger, Texas, to Phoenix. The company would also reverse its Gold Pipeline, which connects with the Explorer Pipeline, allowing refined products from St. Louis and other Midwest supply points to flow toward Borger.
Kinder Morgan would contribute its existing SFPP East Line between El Paso, Phoenix and Tucson. Its SFPP West Line, which currently flows east from Colton, California, to Phoenix, would be reversed to move fuel into California.
Phillips 66 and Kinder Morgan first proposed the system in October 2025 and subsequently solicited commitments from potential shippers. The final investment decision moves the project beyond the proposal and commercial-development stages, although construction remains contingent on regulatory approval.
Refinery closures reshape California fuel market
The project comes as California confronts concerns about fuel availability and affordability after two major refinery shutdowns. Phillips 66 ceased fuel production at its 139,000-barrel-per-day Los Angeles refinery at the end of 2025. Valero Energy subsequently ended refining operations at its 170,000-barrel-per-day Benicia refinery in April 2026.
Western Gateway could replace a substantial portion of the lost in-state production with gasoline, diesel and jet fuel manufactured elsewhere in the United States.
California is largely isolated from the Gulf Coast and Midcontinent refined-products pipeline network. That isolation has left the state dependent on local refineries and increasingly on imports delivered by ship. Western Gateway would create an additional supply option capable of competing with waterborne imports and potentially reducing exposure to overseas-market disruptions.
Notably, the investment indicates that major fuel suppliers project California to require substantial supply of oil and refined products for the foreseeable future despite the state’s policy to reduce long-term oil consumption.