U.S. West Coast to Get Fuel Pipeline Support Amid Refinery Woes

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Phillips 66 and its joint venture partners announced a final investment decision on the Western Gateway pipeline. The network could support fuel supplies in PADD 5 from an artery extended from St. Louis.

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FID Reached on Western Gateway

Amid supply-side concerns, along with issues related to imports, Phillips 66 and its partners on Tuesday announced a final investment decision on the Western Gateway pipeline, a new artery that can reach into the Pacific Coast network.

Industrial Info Resources data find the Western Gateway Pipeline requires US$4.41 billion in investment and could be completed by the end of the decade.
The project is a response to looming fuel shortages along the West Coast, particularly in California. The Wilmington Refinery, and Carson Refinery operated in Los Angeles by Phillips 66, closed in 2025, and the company shed staff early this year in part because of the fading footprint in California.

Industrial Info Resources has been following events since before Phillips 66 received its final batch of waterborne crude oil deliveries for its refinery complex in Los Angeles last year. Valero Energy Corporation closed its 144,000 bpd Benicia, California, refinery and 13,000 bpd Benicia Asphalt Refinery in California in February, further starving the state of gasoline.

The proposed network from Phillips 66 and its partners would be able to carry at least 200,000 barrels per day (bpd) of refined products from St. Louis and into the Pacific Coast market by way of Arizona and California, data show.

"By combining the capabilities of Phillips 66, Kinder Morgan and HF Sinclair, Western Gateway is expected to strengthen fuel supply reliability and deliver a more cost-effective, resilient path for growing markets across the West," Mark Lashier, the chairman and chief executive officer at Phillips 66, said in a statement.

Some 900 miles of new 20-inch and 24-inch diameter pipeline will be constructed from Borger, Texas, to Phoenix, where it will tap into broader networks run by Kinder Morgan. Phillips 66 will construct and operate the new pipeline.

Elsewhere, Californians are already paying the highest retail price for gasoline in the nation at $5.58 for a gallon of regular unleaded, according to AAA. That compares to the national average for Tuesday of $4.01 per gallon.

Green Shoots Amid Supply-Side Pressures

Meanwhile, California Governor Gavin Newsom (D) has pursued a greener agenda, relative to the pro-fossil fuels strategy embraced by U.S. President Donald Trump, a president that's pressed for more oil-related activity in California.

But amid refinery closures, the U.S. Energy Information Administration (EIA), part of the U.S. Department of Energy, had warned that California may be forced to import fuels from out-of-state refineries to meet its transportation demands.

Regional markets are already under pressure, in no small part because of the ongoing conflict in the Middle East. While on a slight increase, federal data show crude oil imports are about 4.4% below the four-week moving average to the first week of August.

For the West Coast, otherwise characterized as PADD 5, inputs over the four-week period are down nearly 10% from the similar period last year. Refinery utilization was around 93%, federal data show.

By destination, it's been at least two weeks since U.S. refiners took in crude oil from either Saudi Arabia or Iraq, presumably because of shipping constraints in and around the Strait of Hormuz.

By the Numbers

• 10% year-on-year decline in PADD 5 imports
• 900 miles of pipe will be needed for Western Gateway

Key Takeaways

• Domestic networks will support PADD 5 refined product levels
• U.S. government had already warned the region might run short

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).