U.S. refiner HF Sinclair is considering expanding its pipeline systems across the Rocky Mountain and West Coast to bolster fuel supplies in markets including California and Nevada, the company said on Wednesday. New pipeline expansions could help ease the strain on West Coast fuel supplies from the planned closures of Phillips 66’s Los Angeles refinery by the end of this year and Valero Energy’s Benicia refinery next year. The planned shutdowns, set to reduce approximately 20% of California’s refining capacity, have prompted regulators to seek alternative fuel supplies.
“(Our) current geographic footprint and infrastructure provide an advantaged position to quickly and efficiently deliver refined products where the market needs are strongest,” HF Sinclair said in a statement.
The plan, currently under review and subject to regulatory and board approvals, could add up to 150,000 barrels per day of incremental product into regional markets. The initial phase, which includes increasing capacity by an estimated 35,000 barrels per day to move fuel from its Rockies production into Nevada, is expected to be online in 2028. This would include expanding the Pioneer Pipeline, a jointly-owned asset with Phillips 66, that connects Sinclair, Wyoming to Salt Lake City, Utah, as well as its UNEV Pipeline that runs from Salt Lake City, Utah, to Las Vegas, Nevada. The Dallas, Texas-based refiner is reviewing its Medicine Bow Pipeline that connects Denver, Colorado to Sinclair, Wyoming, for possible expansion and reversal. It is also evaluating a project to construct a new lateral from Salt Lake City, Utah to Reno, Nevada. Earlier this month, Phillips 66 and Kinder Morgan began soliciting shipper commitments for a proposed pipeline system that will move fuel from the Texas refining hub to bolster supplies in Arizona and California. Last month, Magellan Pipeline, a subsidiary of ONEOK, also began gauging interest in a new pipeline system to transport refined products from Houston and southern Oklahoma to delivery locations in El Paso, Texas, and the Phoenix area. HF Sinclair is due to announce its third-quarter financial results on Thursday.
(Reporting by Nicole Jao in New York and Vallari Srivastava in Bengaluru; Editing by Alan Barona)