DENVER--(BUSINESS WIRE)--DCP Midstream is announcing an agreement to acquire the Seaway Products Pipeline Company from ConocoPhillips and create new natural gas liquids transportation capacity from the Midcontinent to the premium Texas Gulf Coast markets.
The pipeline will be renamed the Southern Hills Pipeline and converted from refined products service to a natural gas liquids (NGL) pipeline running more than 700 miles between two major NGL market hubs – Conway, Kan., and Mont Belvieu, Texas. DCP Midstream will add a 130-mile extension to Conway and a 30-mile extension to Mont Belvieu, as well as pump capacity and associated gathering infrastructure, to the current 580-mile pipeline. The pipeline will have a target capacity of close to 150,000 barrels per day of Y-grade NGLs, and be connected to several DCP Midstream processing plants and anticipated third-party NGL producers. This approximately $750 million to $850 million total investment is expected to have an in-service date as early as mid-2013.
DCP Midstream will operate Southern Hills as a common carrier pipeline. The pipeline will open new capacity for NGLs produced from growing Midcontinent, Rockies and Conway-bound supply. DCP Midstream expects this new transportation capacity will help serve the growing need for Midcontinent transportation to the premium Mont Belvieu market and add value to DCP’s upstream producers.
“The Southern Hills conversion is a game changer for Midcontinent NGL values and a strategic fee-based value chain extension for DCP,” said Tom O’Connor, chairman, president and chief executive officer of DCP Midstream.
“This critical piece of the midstream infrastructure puzzle will increase the value our producers realize for their growing Rockies and Midcontinent NGL production through enhanced connectivity to premium Gulf Coast markets,” O’Connor said. “And, with the ability to provide our customers with integrated gathering, processing and NGL transportation services through a timely solution that leverages pipe already in place, DCP’s competitive position is significantly improved.”
DCP Midstream expects to announce a request for a non-binding expression of interest in the pipeline from shippers later this year.
DCP Midstream, LLC, headquartered in Denver, Colorado, leads the midstream segment as one of the nation's top three largest natural gas gatherers and processors, and the largest natural gas liquids producer and one of the largest marketers in the U.S. DCP Midstream operates in 18 states across producing regions. DCP Midstream is a 50:50 joint venture between Spectra Energy and ConocoPhillips. The Company owns the General Partner of DCP Midstream Partners, LP, a master limited partnership, and provides operational and administrative support to the partnership. For more information, visit the DCP Midstream, LLC website at www.dcpmidstream.com.
DCP Midstream is a Best Place to Work Company in Denver and the largest private company in Denver as rated by the Denver Business Journal.