Phillips 66 and Kinder Morgan Advance Western Gateway Pipeline Project
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 hours ago
0mins
Phillips 66 (PSX) and Kinder Morgan (KMI) announced the advancement of the Western Gateway Pipeline, a proposed refined products pipeline system, following a successful second open season that secured long-term shipper commitments sufficient to move the project forward, subject to the execution of definitive transportation service agreements, joint venture agreements, and respective board approvals. "Customer response during the open season underscores the importance of Western Gateway in addressing long-term refined products logistics needs in the region," said Phillips 66 Chairman and CEO Mark Lashier. "Strong market interest validates the role this project can play in improving supply flexibility and reliability for West Coast markets." The Western Gateway Pipeline will connect Midwest and Gulf Coast refinery supply to Phoenix, Arizona and California markets with connectivity to Las Vegas, Nevada via Kinder Morgan's CALNEV Pipeline. The Western Gateway Pipeline will consist of a new-build pipeline from Borger, Texas to Phoenix, Arizona, combined with Kinder Morgan's existing SFPP, L.P. pipeline from Colton, California to Phoenix, Arizona, which will be reversed to enable east to west product flows into California. The Western Gateway Pipeline will be fed from Midwest and Gulf Coast supplies connected to Borger, Texas. The Gold Pipeline, operated by Phillips 66, which currently flows from Borger to St. Louis, will be reversed to enable refined products from Midwest and Gulf Coast refineries to flow toward Borger and supply the Western Gateway Pipeline. The project is targeting an in-service date of mid-2029.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy PSX?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on PSX
Wall Street analysts forecast PSX stock price to fall
15 Analyst Rating
8 Buy
7 Hold
0 Sell
Moderate Buy
Current: 156.370
Low
110.00
Averages
132.40
High
162.00
Current: 156.370
Low
110.00
Averages
132.40
High
162.00
About PSX
Phillips 66 is a diversified and integrated downstream energy provider that manufactures, transports and markets products. The Company's Midstream segment provides crude oil and refined petroleum product transportation, terminating and processing services, as well as natural gas and natural gas liquids (NGL) transportation, storage, fractionation, gathering, processing and marketing services. Its Chemicals segment consists of its 50% equity investment in Chevron Phillips Chemical Company LLC, which manufactures and markets petrochemicals and plastics on a worldwide basis. Its Refining segment refines crude oil and other feedstocks into petroleum products, such as gasoline, distillates, including aviation fuels. Its Marketing and Specialties segment purchases for resale and markets refined products, mainly in the United States and Europe. Its Renewable Fuels segment processes renewable feedstocks into renewable products at the Rodeo Renewable Energy Complex and at its Humber Refinery.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Western Gateway Pipeline Project Advances
- Project Advancement: Phillips 66 and Kinder Morgan announced the advancement of the Western Gateway pipeline project, which secured long-term shipper commitments during the second open season, ensuring the project's feasibility and demonstrating market confidence.
- Market Connectivity: The Western Gateway pipeline will connect Midwest and Gulf Coast refinery supplies directly to Arizona and California markets, with connectivity to Las Vegas, Nevada, through Kinder Morgan's CALNEV pipeline, enhancing regional logistics capabilities.
- Asset Utilization: The system will combine new pipeline construction with the use and modification of existing assets, including reversing flows in Kinder Morgan's SFPP pipeline and Phillips 66's Gold pipeline, thereby improving resource efficiency and enabling westbound flows.
- Customer Demand: Phillips 66 CEO Mark Lashier emphasized that positive customer feedback during the open season underscores the importance of the Western Gateway in addressing long-term refined products logistics needs in the region, indicating that the project will drive market growth.
See More
Phillips 66 Declares Quarterly Dividend of $1.27 per Share
- Quarterly Dividend Declaration: Phillips 66 has declared a quarterly dividend of $1.27 per share, consistent with previous distributions, indicating the company's stable cash flow and profitability, which is likely to attract more income-focused investors.
- Dividend Yield: The forward yield of 3.25% reflects the company's attractiveness in the current market environment, potentially boosting investor confidence in its stock.
- Shareholder Record Date: The dividend will be payable on June 1, with a record date of May 18 and an ex-dividend date also on May 18, ensuring eligible shareholders receive their payouts promptly, thereby strengthening shareholder relations.
- Market Outlook: Amid rising global oil prices, Phillips 66 forecasts up to $1 billion in derivatives losses; however, the company continues to demonstrate strong execution and adaptability in the market.
See More
US Stocks Surge as Oil Prices Plunge Amid Peace Talks
- Market Rally: The S&P 500 rose 1.20% and the Nasdaq 100 increased by 1.29%, reaching all-time highs, reflecting investor optimism regarding US-Iran peace talks, which may enhance risk appetite in the markets.
- Oil Price Plunge: WTI crude prices fell over 11% to a five-week low after Iran announced the Strait of Hormuz is fully open, easing inflation concerns and causing the 10-year T-note yield to drop 7 basis points to 4.24%.
- Strong Earnings Season: The earnings season started robustly, with 81% of the 48 S&P 500 companies reporting Q1 earnings exceeding estimates, projecting a 12% year-over-year increase in earnings, providing strong support for the stock market.
- Airline Stocks Surge: Airline stocks surged as fuel costs decreased, with Alaska Air Group (ALK) rising over 10% and Royal Caribbean Cruises Ltd (RCL) up more than 7%, indicating market confidence in the recovery of the airline industry.
See More
PHILLIPS 66 ANNOUNCES QUARTERLY DIVIDEND OF $1.27 PER SHARE
- Dividend Announcement: Phillips 66 has declared a quarterly dividend of $1.27 per share.
- Financial Commitment: This dividend reflects the company's ongoing commitment to returning value to its shareholders.
See More
US Stocks Rally as Oil Prices Plunge Amid Peace Talks
- Market Surge: The S&P 500 rose by 1.28% and the Nasdaq 100 reached an all-time high, reflecting investor optimism driven by peace talks between the US and Iran, which may enhance risk appetite and bolster overall market confidence.
- Oil Price Plunge: WTI crude oil prices fell over 13% to a five-week low after the Strait of Hormuz reopened, easing inflation concerns and causing the 10-year Treasury yield to drop by 8 basis points, further supporting the bond market.
- Earnings Growth Expectations: Q1 earnings for the S&P 500 are projected to increase by 12% year-over-year, although excluding the tech sector, growth is only 3%, indicating resilience in corporate performance amid economic recovery and providing market support.
- Airline Stocks Soar: With reduced fuel costs, Alaska Air Group and United Airlines surged by over 14% and 11%, respectively, demonstrating the positive impact of falling oil prices on the airline industry, which could enhance profitability for related companies.
See More
Middle East Oil Disruptions Will Have Long-Lasting Effects
- Long-Term Market Impact: Phillips 66 CEO Mark Lashier stated that disruptions in the Middle East will haunt markets for an extended period, with some effects rebounding quickly while others will take longer, highlighting the fragility of the global energy system.
- Global Energy System Reconstruction: Lashier emphasized that a ceasefire in the Middle East would not suffice to repair the damage done to the global energy system, necessitating redesign and rebuilding of infrastructure, which underscores the complexity and vulnerability of current energy supply chains.
- Significant Logistical Shift: With approximately 12 million barrels per day of oil effectively trapped, Asian buyers have been forced to aggressively acquire crude from North America and the Atlantic Basin, resulting in a global reshuffling that is not only costly but inefficient, potentially leading to permanent changes.
- Stock Price Volatility: Despite Phillips 66 shares slipping 8% over the past 30 days, they have surged nearly 70% in the past year, reflecting a contradiction between market confidence in the company's long-term prospects and short-term volatility.
See More
Western Gateway Pipeline Project Advances
- Project Advancement: Phillips 66 and Kinder Morgan announced the advancement of the Western Gateway pipeline project, which secured long-term shipper commitments during the second open season, ensuring the project's feasibility and demonstrating market confidence.
- Market Connectivity: The Western Gateway pipeline will connect Midwest and Gulf Coast refinery supplies directly to Arizona and California markets, with connectivity to Las Vegas, Nevada, through Kinder Morgan's CALNEV pipeline, enhancing regional logistics capabilities.
- Asset Utilization: The system will combine new pipeline construction with the use and modification of existing assets, including reversing flows in Kinder Morgan's SFPP pipeline and Phillips 66's Gold pipeline, thereby improving resource efficiency and enabling westbound flows.
- Customer Demand: Phillips 66 CEO Mark Lashier emphasized that positive customer feedback during the open season underscores the importance of the Western Gateway in addressing long-term refined products logistics needs in the region, indicating that the project will drive market growth.
See More
Phillips 66 Declares Quarterly Dividend of $1.27 per Share
- Quarterly Dividend Declaration: Phillips 66 has declared a quarterly dividend of $1.27 per share, consistent with previous distributions, indicating the company's stable cash flow and profitability, which is likely to attract more income-focused investors.
- Dividend Yield: The forward yield of 3.25% reflects the company's attractiveness in the current market environment, potentially boosting investor confidence in its stock.
- Shareholder Record Date: The dividend will be payable on June 1, with a record date of May 18 and an ex-dividend date also on May 18, ensuring eligible shareholders receive their payouts promptly, thereby strengthening shareholder relations.
- Market Outlook: Amid rising global oil prices, Phillips 66 forecasts up to $1 billion in derivatives losses; however, the company continues to demonstrate strong execution and adaptability in the market.
See More
US Stocks Surge as Oil Prices Plunge Amid Peace Talks
- Market Rally: The S&P 500 rose 1.20% and the Nasdaq 100 increased by 1.29%, reaching all-time highs, reflecting investor optimism regarding US-Iran peace talks, which may enhance risk appetite in the markets.
- Oil Price Plunge: WTI crude prices fell over 11% to a five-week low after Iran announced the Strait of Hormuz is fully open, easing inflation concerns and causing the 10-year T-note yield to drop 7 basis points to 4.24%.
- Strong Earnings Season: The earnings season started robustly, with 81% of the 48 S&P 500 companies reporting Q1 earnings exceeding estimates, projecting a 12% year-over-year increase in earnings, providing strong support for the stock market.
- Airline Stocks Surge: Airline stocks surged as fuel costs decreased, with Alaska Air Group (ALK) rising over 10% and Royal Caribbean Cruises Ltd (RCL) up more than 7%, indicating market confidence in the recovery of the airline industry.
See More
PHILLIPS 66 ANNOUNCES QUARTERLY DIVIDEND OF $1.27 PER SHARE
- Dividend Announcement: Phillips 66 has declared a quarterly dividend of $1.27 per share.
- Financial Commitment: This dividend reflects the company's ongoing commitment to returning value to its shareholders.
See More
US Stocks Rally as Oil Prices Plunge Amid Peace Talks
- Market Surge: The S&P 500 rose by 1.28% and the Nasdaq 100 reached an all-time high, reflecting investor optimism driven by peace talks between the US and Iran, which may enhance risk appetite and bolster overall market confidence.
- Oil Price Plunge: WTI crude oil prices fell over 13% to a five-week low after the Strait of Hormuz reopened, easing inflation concerns and causing the 10-year Treasury yield to drop by 8 basis points, further supporting the bond market.
- Earnings Growth Expectations: Q1 earnings for the S&P 500 are projected to increase by 12% year-over-year, although excluding the tech sector, growth is only 3%, indicating resilience in corporate performance amid economic recovery and providing market support.
- Airline Stocks Soar: With reduced fuel costs, Alaska Air Group and United Airlines surged by over 14% and 11%, respectively, demonstrating the positive impact of falling oil prices on the airline industry, which could enhance profitability for related companies.
See More
Middle East Oil Disruptions Will Have Long-Lasting Effects
- Long-Term Market Impact: Phillips 66 CEO Mark Lashier stated that disruptions in the Middle East will haunt markets for an extended period, with some effects rebounding quickly while others will take longer, highlighting the fragility of the global energy system.
- Global Energy System Reconstruction: Lashier emphasized that a ceasefire in the Middle East would not suffice to repair the damage done to the global energy system, necessitating redesign and rebuilding of infrastructure, which underscores the complexity and vulnerability of current energy supply chains.
- Significant Logistical Shift: With approximately 12 million barrels per day of oil effectively trapped, Asian buyers have been forced to aggressively acquire crude from North America and the Atlantic Basin, resulting in a global reshuffling that is not only costly but inefficient, potentially leading to permanent changes.
- Stock Price Volatility: Despite Phillips 66 shares slipping 8% over the past 30 days, they have surged nearly 70% in the past year, reflecting a contradiction between market confidence in the company's long-term prospects and short-term volatility.
See More
