Western Gateway Pipeline to reverse flow, bringing fuel to California

CALIFORNIA – Energy companies Phillips 66 and Kinder Morgan, Inc. unveiled plans on October 20 for a new pipeline system designed to bring fuel from Texas into the western U.S.—including California.

California is facing a wave of refinery closures and tightening fuel supplies.

The proposed Western Gateway Pipeline would transport refined fuels from Phillips 66’s Borger Refinery in Texas to Phoenix, Arizona.

From there, it would connect to Kinder Morgan’s existing pipeline network, which currently moves fuel from Southern California to Arizona and Nevada.

Reversing the flow toward California

Under the plan, Kinder Morgan’s existing pipeline, which currently moves fuel from Colton, California, to Phoenix, would be reversed to allow product to flow back into California.

This shift would allow refined fuels from Phillips 66’s Borger Refinery and other connected markets to reach California more efficiently.

The system would also integrate with Kinder Morgan’s CALNEV Pipeline, extending Midwest supply to Southern California and Las Vegas to help maintain fuel reliability across both markets.

California’s Refining Decline

California is projected to lose approximately 17% of its oil refining capacity over the next 12 months due to the planned closures of two major refineries.

Phillips 66 is set to shut down its Wilmington refinery (Los Angeles area) by the end of 2025. This facility processes about 139,000 barrels per day, accounting for roughly 8% of the state’s refining capacity.

Valero plans to cease operations at its Benicia refinery by April 2026, which processes approximately 145,000 barrels per day, representing about 9% of California’s refining capacity.

Valero CEO Lane Riggs cited a challenging regulatory and enforcement environment for the decision to cease operations.

The number of refineries in California processing crude oil has been shrinking. Six plants have shut since 2008. Two of those have converted to producing renewable diesel.

Open Season Underway

Phillips 66 and Kinder Morgan said interested shippers may submit requests for additional information during the binding open season, which runs from October 20 to December 19, 2025.

This process allows fuel companies to reserve capacity on the pipeline, a key step before the project can start supplying California and other Western markets.

The project is in the planning stage and will require shipper commitments and regulatory approvals before a final investment decision is made.