San-Antonio based oil and gas refiner Andeavor announced plans Friday to build a 130-mile crude oil pipeline system in the Delaware Basin, which extends from West Texas into New Mexico.
The Conan Crude Oil Gathering system will transport 250,000 barrels per day and terminate in Loving County, Texas. From there, the pipeline will connect with long-haul pipeline carriers to service areas farther east.
It will draw from the oil-rich Permian Basin, which can be divided into two areas, the Delaware Basin to the west and the Midland Basin to the east.
Late last year, the U.S. Geological Survey discovered the United States' largest continuous oil deposit in the Permian region. By some estimates, the Permian has yielded over 30 billion barrels of oil since 1920.
Destin Singleton is a communications representative with the Andeavor Corporation. She spoke about how the pipeline's placement will affect the state.
"So it's a pretty remote region, a very growing part of the oil and gas development in our state," she said. "Actually a lot of jobs in San Antonio have been because of the Permian Basin."
News of the pipeline's construction comes just days after Andeavor reported a significant drop in profits for the second quarter as compared to last year. Singleton says that won't impact the pipeline.
"We have made a decision to move forward, and we actually have commitments from producers in the area."
According to a press release issued by the company, "the estimated capital investment for the first phase of the gathering system is approximately $225 million of which $75 million is expected to be spent in 2017. "
Andeavor expects the Conan Crude Oil Gathering system to be up and running by mid-2018.