Energy giants Phillips 66, Kinder Morgan, and HF Sinclair have finalized a joint venture agreement to construct the $5 billion Western Gateway Pipeline system, a major infrastructure push designed to supply the U.S. West Coast ahead of anticipated California refinery closures.

The proposed 2,100-kilometer (1,300 miles) refined products pipeline will have a carrying capacity of 230,000 barrels per day. Target completion for the infrastructure project is 2029.

Designed to link Midwest and Gulf Coast origin points to fuel-hungry markets in Arizona and California, the new system will establish a crucial supply route starting in St. Louis, Missouri.

The project directly addresses California's relative isolation from major refining hubs, a vulnerability that frequently exposes the state to severe supply disruptions and localized price spikes.

To construct the expansive system, existing infrastructure will be integrated and reversed.

Phillips 66 will reverse its Gold Pipeline, which currently transports product from Borger, Texas, to St. Louis, transforming it into an east-to-west line.

Similarly, Kinder Morgan will reverse its existing pipeline stretching between Colton, California, and Phoenix, Arizona.

Once a newly constructed segment from Borger to Phoenix is complete, Kinder Morgan will contribute its existing SFPP East Line and West Line pipeline assets into the joint venture, valued at approximately $1.5 billion.

Funding and ownership structure for the $5 billion enterprise value venture will be split among the three partners:

• Phillips 66: Holds a 49.9% ownership stake, contributing nearly $2.5 billion in cash.
• Kinder Morgan: Holds a 35.1% ownership stake, contributing $250 million in cash along with key pipeline assets.
• HF Sinclair: Holds a 15% ownership stake, contributing $750 million in cash.

Analyst notes from UBS indicate that the east-to-west transit network will provide a substantial boost to the refining systems of Phillips 66 and HF Sinclair.

The new route allows them to reroute refined product westward during winter months when fuel demand traditionally softens across Midwest and mid-continent markets.

Commercial viability for the pipeline project is already secured, backed predominantly by 10-year take-or-pay commitment contracts.