Phillips 66 and Kinder Morgan announced that the initial open season for the Western Gateway Pipeline has closed and that a second open season will begin in January 2026. The joint venture will run from Borger, Texas, through Phoenix, Arizona, and connect to Kinder Morgan’s SFPP line to reach Los Angeles markets. The project combines a new‑build segment with the reversal of Kinder Morgan’s SFPP line and Phillips 66’s Gold Pipeline, creating a continuous product corridor that will deliver refined products from mid‑continent refineries to high‑value West Coast markets.
The announcement follows Phillips 66’s Q3 2025 earnings, in which the company reported adjusted earnings of $1.0 billion ($2.52 per share) and a net operating cash flow of $1.2 billion. The results beat analyst consensus by $0.27 per share, driven by strong refining utilization (99%) and fee‑based midstream contracts that insulated the company from commodity price swings. The pipeline expansion is a key component of Phillips 66’s strategy to reach $4.5 billion in midstream EBITDA by 2027, and the new capacity will help the company capture the growing demand for refined products in California as several refineries plan closures.
Kinder Morgan’s Q3 2025 financials showed revenue of $4.15 billion and adjusted EBITDA of $1.99 billion, up 6% year‑over‑year. The company’s product pipeline segment, which includes the SFPP line, contributed significantly to the growth, and the Western Gateway project will further strengthen its fee‑based revenue base. CEO Kim Dang highlighted the project as a “strategic partnership that enhances energy reliability and meets growing demand across the West.”
The Western Gateway Pipeline is expected to be completed by 2029, pending permits and regulatory approvals. By providing a new route for refined products, the project will address the supply gap created by California refinery closures, including Phillips 66’s Los Angeles refinery and Valero’s Benicia refinery. The pipeline’s new-build segment and infrastructure reversals will reduce transportation costs and improve delivery reliability for shippers in the Los Angeles market.
The second open season, scheduled to start in January 2026, will allow shippers to secure capacity on the new corridor. The joint tariff arrangement gives shippers fee‑based access to the Los Angeles market, expanding Phillips 66’s downstream reach and creating new revenue streams for the midstream segment. The project aligns with both companies’ long‑term growth plans and positions them to capture a larger share of the high‑margin West Coast refined‑product market.
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