Andeavor Building $225M Pipeline in TX
Andeavor Corp., an oil and gas refinery based in San Antonio, is set to build a $225 million pipeline across west Texas.
The 130-mile span of the Crude Oil Gathering Pipeline system is expected to carry 250,000 barrels of crude oil per day during its first phase. The venture will begin in Lea County, New Mexico, and will end in Loving County, Texas.
The Crude Oil Gathering Pipeline
The Permian Basin, located in the western half of Texas and home to a significant chunk of the state’s oil industry, is divided into two segments—the western Delaware Basin, and the eastern Midland Basin. According to Forbes, the basin has produced 30 billion barrels of oil since 1920.
"So, it's a pretty remote region, a very growing part of the oil and gas development in our state," Destin Singleton, a communications representative with Andeavor, told Texas Public Radio. “Actually, a lot of jobs in San Antonio have been because of the Permian Basin."
Currently, future plans for the system are geared toward expanding the pipeline’s capacity to accommodate 500,000 barrels a day.
The pipeline's end goal is to feed Andeavor's El Paso refinery.
According to the San Antonio Business Journal, the estimated initial capital investment for the first phase of the endeavor is $225 million, the first $75 million of which is being spent this year.
Andeavor is moving forward with the pipeline despite having recently reported a significant drop in profits for its second quarter, in comparison with the same quarter from last year. Singleton stated that this would not impact the pipeline.
"We have made a decision to move forward, and we actually have commitments from producers in the area,” she said.
According to Andeavor, the company received “sufficient commitments from third party shippers to warrant construction of the Conan Crude Oil Gathering Pipeline system in the Delaware Basin.”
The newest Texas pipeline was originally announced in May by Western Refining Inc., which is based in El Paso. In June, the company merged with Tesoro Corp., noted the San Antonio Business Journal, and the new, combined entity rebranded as Andeavor earlier this month.
The Conan Crude Oil Gathering System is slated to be running by mid-2018.