San Antonio-based Andeavor has agreed to buy Rangeland Energy II LLC, which oversees a bundle of energy assets in the Permian Basin.

Rangeland II owns and operates four core facilities in the Delaware and Midland sub-basin properties, led by the recently constructed 110-mile Rio Pipeline with throughput capacity of 145,000 b/d.

Financial details were not disclosed.

“Once fully integrated, the combination of the two systems will provide producers access to multiple markets by connecting to existing takeaway pipeline systems,” Andeavor management said. “The combined system also supports Andeavor's development of additional gathering systems in the area, as well as enhancing commercial opportunities by providing direct access to the Midland market hub.”

The Rio system has connectivity at State Line and Midland terminals in West Texas and is designed as a batched system, capable of blending multiple crude gravities to meet third-party specifications.

The system and the terminals, including Rangeland II’s Conan Crude Oil Gathering System under construction, are to be integrated with Andeavor’s Permian business. Rangeland II also controls three Permian-based oil storage terminals and a proppant sand storage/truck loading facility.

Rangeland II is backed in part by private equity financing from EnCap Flatrock Midstream, which has financed other Rangeland entities as well, including the South Texas Energy Products System in Corpus Christi, TX, for storing refined products, liquefied petroleum gas and other hydrocarbons for transport to terminals primarily in Mexico.

Andeavor also is eyeing more growth in Mexico. Last summer the company signed a terminaling agreement with Mexico's Petroleos Mexicanos to supply 30,000-40,000 b/d of transportation fuels to Sonora and Baja California.

Andeavor, formerly Tesoro Corp., operates 10 refineries with a combined capacity of 1.2 million b/d in the Midcontinent and western United States.

The acquisition is set to close by the end of March, pending regulatory approval. The Rangeland II pipeline assets are to be dropped down to Andeavor Logistics LP at a later date, management said.