Following the latest sanctions on Russian energy resources, the global energy community is turning to the United States to fill the gap left behind by the end of Moscow’s energy flow into the world. Now, two energy majors from the US are considering and contemplating a new refined product pipeline that would link the great state of Texas to the Western states of the United States, fostering trade and providing essential energy products. The pair of companies has established an open season for the proposed project recently, with interested parties urged to get in touch.
Texas and California may become a lot closer than either of them wants or expects
Texas has been the cornerstone of the American energy sector for generations, while California has become the most blue state in recent memory, boosted by the recent proposal by Governor Gavin Newsom to gain five more seats in Congress by redistricting several areas. Geopolitical differences aside, the pair of US states will hopefully become a lot closer in the near future through the proposed Western Gateway pipeline.
Phillips 66, a leading integrated downstream energy provider, and Kinder Morgan, one of the biggest energy infrastructure companies in North America, have agreed to weigh a possible deal for the Western Gateway pipeline that would connect Texas to downstream markets in Arizona and California. Additionally, the project will reverse flow from Kinder Morgan’s existing SFPP pipeline from California to Arizona.
The proposed deal will also construct an all-new pipeline between Texas and Arizona
The pair of energy giants has noted that if the proposal passes muster, they will construct a new pipeline connecting Texas to Arizona, which is basically a desert. The deal exemplifies the cooperative nature of the American energy market, so long as it benefits the US energy market. The pair has also established an open season that will close on December 19.
“During this period, interested shippers may submit requests for additional information to [email protected]. The Western Gateway Pipeline will be a partnership between Phillips 66 and Kinder Morgan to create incremental capacity for refined products from Borger, Texas to Arizona and California.” – Kinder Morgan
Phillips 66 has big plans for the California energy sector
The company has noted that the new pipeline being contemplated will be essential to the California energy sector, as it plans to close down its 139,000 b/d Los Angeles refinery. Another American energy company, Valero, will also shut down operations at its 145,000 b/d refinery in Benicia by April of next year. So it would not be a stretch to say the Californian energy sector is facing some hard times in the near future.
Phillips 66 has also stated its ambition to buy out its joint venture partner, Cenovus Energy, to gain full ownership of a refinery in Borger, as well as the 345,000 b/d Wood River refinery in Roxana, Illinois. The global energy sector is relying on the United States to pick up the pace and develop new projects, as the sanctions on Russian energy have begun to ripple through the global energy market.
The US energy sector will see its role in the international community changing in the near future
The news that Phillips 66 and Kinder Morgan are contemplating the new pipeline will be welcomed by the rest of the world, increasing America’s energy expertise and production. While the new pipeline will not feed Europe, the impact of increasing production in the US can not be understated, as the world is set to see record diesel import levels as Russian supply sanctions take hold. Whether or not the proposed project comes to fruition is yet to be determined, but we, along with the rest of the international energy sector, are sure hoping it will.
