Phillips 66, Kinder Morgan and HF Sinclair have finalized a joint venture and taken a final investment decision on the Western Gateway Pipeline, a proposed 1,300-mile refined products system carrying fuel from St. Louis, Missouri, and expanded Gulf Coast origin points to Arizona and California. The project carries an enterprise value of approximately $5.0 billion.
Ownership splits at 49.9% for Phillips 66, 35.1% for Kinder Morgan and 15% for HF Sinclair, the companies said. Phillips 66 Chairman and CEO Mark Lashier said the decision "reflects the strength of this industry partnership." Kinder Morgan CEO Kim Dang said the venture combines "strategic supply access, existing infrastructure and experienced operators." HF Sinclair CEO Franklin Myers called it a "transformational endeavor shaping the fuels markets of the West."
What gets built
The system has a design capacity of 230,000 barrels per day and is being developed to allow future expansion with limited capital and no new pipe. It combines new construction with existing assets:
- An approximately 900-mile new-build pipeline in 20-inch and 24-inch diameter running from Borger, Texas, to Phoenix, Arizona. Phillips 66 will construct and operate this segment.
- Kinder Morgan's existing SFPP East Line, running from El Paso, Texas, to Phoenix and Tucson, Arizona, and its SFPP West Line, running from Colton, California, to Phoenix. The West Line would be reversed to move product east to west into California, and Kinder Morgan will keep operating both lines.
- Phillips 66's Gold Pipeline, which connects to the Explorer Pipeline and would also be reversed, allowing refined products to flow toward Borger to supply the new system.
How the money splits
When the new-build segment from Borger to Phoenix is finished, Kinder Morgan will contribute its existing SFPP East and West Line assets to the joint venture at a value of about $1.5 billion. Based on the roughly $5.0 billion enterprise value, the three partners' cash contributions are:
| Company | Cash contribution |
|---|---|
| Phillips 66 | ~$2.5 billion |
| HF Sinclair | ~$750 million |
| Kinder Morgan | ~$250 million |
The system will run primarily on 10-year, take-or-pay contracts, agreements in which shippers pay for reserved pipeline capacity whether or not they use it. Western Gateway is targeting completion in 2029, subject to permits and regulatory approvals.
We reported last month that Kinder Morgan posted record Q2 net income and was tracking ahead of its 2026 budget.
