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Phillips 66, Kinder Morgan eye new pipeline to bolster US West Coast fuel supply
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Phillips 66, Kinder Morgan eye new pipeline to bolster US West Coast fuel supply
Oct 20, 2025 4:36 PM

Oct 20 (Reuters) - Phillips 66 and Kinder Morgan ( KMI )

on Monday began soliciting shipper commitments for a

proposed pipeline system that will move fuel from the Texas

refining hub to bolster supplies in Arizona and California as a

spate of refinery closures stokes supply concerns.

If constructed, the new pipelines could help ease the strain

on West Coast fuel supply from the planned closures of Phillips

66's Los Angeles refinery by the end of this year and Valero

Energy's ( VLO ) Benicia refinery next year. Together, those

refineries produce about 20% of California's fuel requirements

and help meet the needs of neighboring states. The planned

closures have caused a scramble by regulators to find

alternative means of supply.

The system proposed by Phillips 66 and Kinder Morgan ( KMI ) will

include the construction of a new pipeline from Borger, Texas,

to Phoenix. The companies will also reverse the direction of

flows on an existing Kinder Morgan ( KMI ) pipeline that currently

delivers fuel from Colton, California, to Phoenix, they said in

a joint statement.

Flows will also be reversed on the Phillips 66-operated Gold

Pipeline, which currently delivers products from Borger, Texas,

to St. Louis, Missouri. Reversing it will help deliver more fuel

from Midwestern U.S. refineries into the proposed new pipeline

system from Borger to Arizona, called the Western Gateway

Pipeline, the companies said.

"This is potentially huge news for motorists in California,

Las Vegas, Arizona and great news for refiners in the Gulf,"

GasBuddy analyst Patrick De Haan said on social media platform

X. California drivers pay the highest gasoline prices in the

Lower 48 U.S. states and fuel prices were expected to rise

further from the planned refinery closures.

The new pipeline system could allow Gulf Coast refiners to

raise capacity to feed these pipelines, especially in

politically advantageous states, De Haan said.

Last month, Magellan Pipeline, a subsidiary of ONEOK ( OKE )

, also began gauging interest in a new pipeline system to

transport refined products from Houston and southern Oklahoma to

delivery locations in El Paso, Texas, and the Phoenix area.

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