Locator: 49556PIPELINES.
This was the second part of the "encore" edition RBN Energy posted yesterday, Thanksgiving Day.
HF Sinclair joined the fray on October 29 with an announcement that it is evaluating a multi-phased expansion of its refined products pipeline network across parts of PADD 4 (Rockies) and PADD 5 (West Coast) that would allow up to 150 Mb/d of incremental product to flow into various markets. “The initiative is designed to address the increasing supply and demand imbalances in key Western markets, particularly Nevada and multiple markets in California, resulting from announced refinery closures on the West Coast,” the refining-and-midstream company said in a statement. HF Sinclair said its geographic footprint and infrastructure “provide an advantaged position to quickly and efficiently deliver refined products where the market needs are strongest.”
The first phase of the plan would include expanding the Pioneer Pipeline (red line in Figure 3 below) — jointly owned by HF Sinclair and Phillips 66 (and now running at or near capacity) — from Sinclair, WY, to Salt Lake City and debottlenecking HF Sinclair’s wholly owned UNEV Pipeline (magenta line) from Salt Lake City to Las Vegas. That project, targeted for a final investment decision (FID) in mid-2026 and completion in 2028, would allow about 35 Mb/d of additional Rockies-sourced supply to move into Nevada. Additional phases under evaluation would, if ultimately approved:
- Expand and reverse the flow on HF Sinclair’s Medicine Bow Pipeline (dark-red line) between Denver and Sinclair so it runs west, not east.
- Add still more capacity to the Pioneer Pipeline from Sinclair to Salt Lake City and the UNEV Pipeline from Salt Lake to Las Vegas.
- Build a new pipeline lateral from Salt Lake City to Reno, NV (dashed purple line).
Figure 3. Selected HF Sinclair Refinery and Pipeline Assets. Source: RBN
During HF Sinclair’s Q3 earnings call on October 30, CEO Timothy Go said he sees the proposed pipeline projects to be “complementary to the two other pipelines that were announced.” He said the ONEOK and Phillips 66/Kinder Morgan plans involve PADD 2 and PADD 3 barrels being piped west to “the south area” in Phoenix and beyond, while HF Sinclair is “really talking Rockies barrels going in on the northern side into Nevada.” He added that his company’s projects would mostly involve “equity barrels” from HF Sinclair (and possibly Phillips 66) “as opposed to open-season, third-party barrels,” and that only a small element of the plan — the lateral from Salt Lake City to Reno — would be a greenfield pipeline. (Reno currently receives refined products from the Bay Area via Kinder Morgan’s North Pipeline, but flows on that pipe may be impacted by the impending closure of Valero’s 150-Mb/d Benicia refinery northeast of San Francisco.)
Asked about the rationale for reversing the company’s Medicine Bow Pipeline (aka MedBow) so it flows west from Denver, HF Sinclair EVP-Commercial Steve Ledbetter said that new pipeline capacity from PADD 2 to Denver — ONEOK’s planned 230-Mb/d refined products pipeline from Scott City, KS, to Denver, slated to come online in mid-2026 — will “pull barrels out of the Midcon” (including some from HF Sinclair’s El Dorado refinery in Kansas) and reduce the value of refined products now being piped into Denver from the company’s Sinclair refinery on MedBow. Over time, he said, it may well make economic sense not only to reverse MedBow but to expand it so more HF Sinclair equity barrels from El Dorado can move “into PADD 5, both Nevada and eventually into California.” (We think it’s possible HF Sinclair will make MedBow bidirectional to maximize its flexibility.)
During ONEOK’s October 29 earnings call, EVP and Chief Commercial Officer Sheridan Swords said customer interest in the company’s Sun Belt Connector from El Paso to Phoenix is driven by the fact that ONEOK’s pipeline system east of El Paso is “already connected not only to all the Midcon refiners ... but we also have extensive connectivity into the refining center on the Gulf Coast.”
Phillips 66, in turn, touted the Western Gateway project’s ability to transport price-advantaged barrels from the company’s Midcon and Texas Panhandle refineries to Arizona and Southern California. EVP Brian Mandell added this: “The way I think about it is, PADD 5 is going to look very similar to PADD 1” — the East Coast — “where you have a short market, you have a pipeline that brings in domestic volumes like Colonial does to PADD 1, and then you have barrels coming in from overseas.” He noted that, with more refinery retirements in California, he expects the Golden State will need both piped-in and waterborne barrels.
Other midstreamers with extensive refined products pipeline networks also are being asked about these developments. For example, during Enterprise Products Partners’ October 30 earnings call, an analyst wondered whether HF Sinclair’s plan could lead to better utilization of — and new marketing opportunities for — Enterprise’s new Texas Western (TW) refined products pipeline system from the Houston area to Grand Junction, UT, which was completed a year ago. Justin Kleiderer, the company’s SVP for pipelines and terminals, said, “We’ll hang our hat on two things with respect to the system. One is we run a unique corridor pretty much direct to Salt Lake (City), and to the extent that Salt Lake gets net shorter as a result of (the HF Sinclair) projects, then we'd stand to be the beneficiary.”
He added, finally, “If you zoom out to our overall product system, both our TW system and our legacy TE system benefit from Midcontinent pricing being at a premium to the Gulf. And really all three of these projects that have been announced” — Sun Belt Connector, Western Gateway and HF Sinclair’s — “do some degree of that. So, our overall product system will benefit if any of them go (forward). Again, early days, we'll have to see how it plays out.”
