Core Insights - Phillips 66 (PSX) and Kinder Morgan, Inc. (KMI) announced a second open season for the Western Gateway Pipeline due to strong customer demand, starting on January 16, 2026, and ending on March 31, 2026 [1][5] Group 1: Pipeline Overview - The Western Gateway Pipeline aims to transport refined fuels to western markets by upgrading and redirecting existing pipelines [2] - It includes a new connecting pipeline from Borger, TX, to Phoenix, AZ, linking to KMI's existing SFPP pipeline, enabling fuel transport to California after flow reversal [2][4] - The PSX-operated Gold Pipeline will reverse its flow direction to facilitate fuel transportation from the Midwest to Borger, TX, and then to California via the Western Gateway Pipeline [3] Group 2: Market Impact and Financials - The Western Gateway Pipeline will enhance the transport of refined products from refineries near Borger, TX, and the Midwest to Phoenix and California, with connections to Las Vegas and Los Angeles [4][9] - KMI and PSX are expected to generate additional cash flow and strengthen their business models due to robust demand for the pipeline, enhancing investor appeal [5] - Both companies currently hold a Zacks Rank 3 (Hold), indicating stable fee-based revenues insulated from crude price volatility [5]

Group 1 - Phillips 66 (PSX) and Kinder Morgan (KMI) are establishing the Western Gateway Pipeline to transport refined fuel to western markets by upgrading and redirecting existing pipelines [1][9] - The initial open season for the pipeline received strong interest, leading to plans for another round of sign-ups in January 2026 to allocate remaining capacity [2][5] - The pipeline will extend to deliver refined products to the Los Angeles market, connecting Borger, Texas, to Phoenix, Arizona, and reversing the flow of the SFPP pipeline to transport fuel westward [3][4][9] Group 2 - KMI and PSX are midstream companies generating stable fee-based revenues, making them less vulnerable to oil and gas price volatility, with robust demand for the pipeline expected to enhance their business stability and cash flow [5] - Other midstream players like The Williams Companies, Inc. (WMB) and Enterprise Products Partners L.P. (EPD) also generate stable revenues and are less exposed to price volatility, currently holding a Zacks Rank 3 [6] - WMB plans to invest $3.95 billion to $4.25 billion in capital expenditures by 2025 for growth projects, significantly higher than the $1.5 billion spent in 2024 [7]