Western Gateway - Exploring Company and Industry Implications

Research evidence excerpt

Western Gateway - Exploring Company and Industry Implications

TD SECURITIES (USA) LLC INDUSTRY UPDATE

June 11, 2026

■Midstream Western Gateway - Exploring Company and

■Refining & Marketing

Industry Implications

Jason Gabelman THE TD COWEN INSIGHT

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We estimate the proposed Western Gateway PSX/KMI JV will cost $4.1B net of KMI's $1.1B asset

jason.gabelman@tdsecurities.com

contribution, for 7.3x capex/EBITDA. KMI incremental capex/EBITDA should be 6x, in line with

Will Avila its other projects, while PSX should be 5x net of uplift to winter Midcon gasoline. We do not

646 562 1344 expect the project will impact CA product prices given only 75kbd will end up in the state.

will.avila@tdsecurities.com

Anthony Petrino Western Gateway 6x Capex/EBITDA on KMI Econs; 5x on PSX Econs

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Western Gateway (WG), a 200kbd proposed JV pipeline by PSX and KMI to move product fromanthony.petrino@tdsecurities.com

the Midcon to the West Coast, could be FID'd this summer. We estimate 7.3x capex/EBITDA on

Jeremy Meanwell $4.1B capex. KMI has suggested the incremental cash cost and EBITDA will meet its investment

646 562 1374

hurdles of 6x capex/EBITDA and mid-teen returns, which we anticipate it will accomplish on

jeremy.meanwell@tdsecurities.com

$1B cash capex. WG should tighten an oversupplied winter Midcon gasoline market; if we

embed this benefit for PSX, we see its economics at 5x capex/EBITDA on its $2B capex.

A positive FID is modestly positive for KMI given a lack of pre-FID project value. It may be

less impactful to PSX given refiners are valued on near-term dynamics, though it supports

Midstream growth and Midcon refining margins medium term.

Project Scope

WG involves a 200kbd new pipe from Borger to El Paso, twinning of existing 125kbd SFPP