Locator: 49555PIPELINES.
This was the first part of the "encore" edition RBN Energy posted yesterday, Thanksgiving Day.
A few days ago, HF Sinclair joined ONEOK, Phillips 66 and Kinder Morgan in planning pipeline projects to move more refined products to Western markets. It’s too soon to say how many of these projects will come to fruition, but what’s certain is that the efforts to transport large volumes of gasoline, diesel and jet fuel west from PADDs 2, 3 and 4 will significantly impact refinery economics across vast swaths of the U.S. In today’s RBN blog, we‘ll discuss the pipeline projects being proposed and how they will affect market dynamics.
Blogging about the latest plan to build a new refined products pipeline — or expand existing pipes — across the deserts of the West has become a regular thing for us in the past couple of months. First, there was ONEOK’s proposed Sun Belt Connector, a 24-inch-diameter greenfield pipeline (dashed orange arrow in Figure 1 below) that would run from El Paso, TX, to the Phoenix area and be connected to the company’s existing refined products pipeline system across Texas and Oklahoma (blue lines and yellow tank icons). The new pipe, which would come online by mid-2029, would have an initial capacity of 200 Mb/d but that could be increased significantly if demand warrants.
Figure 1. ONEOK’s Proposed Sun Belt Connector. Source: RBN
A few weeks later, Phillips 66 and Kinder Morgan said they had jointly initiated a binding open season for their proposed Western Gateway Pipeline that will end on December 19. If all goes to plan, the new system will be up and running by 2029. Western Gateway would consist of a new, ~800-mile, 20-inch pipeline (dashed dark-orange line in Figure 2 below) from Borger, TX, to Phoenix and Kinder Morgan’s 515-mile, 20-inch West Line (solid dark-orange line, part of the SFPP system) between Phoenix and Colton, CA, whose current west-to-east flow direction would be reversed. The Borger-to-El-Paso leg of the new pipeline would be along a new right of way, while the El-Paso-to-Phoenix run would utilize portions of the right of way for the 16- and 12-inch pipelines that comprise the SFPP’s East Line. (Those pipes — light-orange and yellow lines west of El Paso — would become part of the joint venture but are not included in the Western Gateway open season.)
Figure 2. Phillips 66’s and Kinder Morgan’s Proposed Western Gateway Pipeline. Source: RBN
Western Gateway would be fed from supplies connected to Borger as well as supplies already feeding the East Line. The Phillips 66-operated Gold Pipeline (gold line), which currently flows from Borger to St. Louis, also would be reversed to enable refined products from Midcontinent refineries such as the Ponca City facility in Oklahoma and the Wood River facility in Roxana, IL, to flow toward Borger, where yet another Phillips 66 refinery is located. (Phillips 66 held only 50% ownership interests in the Wood River and Borger refineries until early October, when it closed on the previously announced purchase of Cenovus Energy’s half-stakes in the refineries for $1.4 billion.)
