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Released November 07, 2018 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--DCP Midstream LP (NYSE:DPM) (Denver, Colorado) is rushing to take advantage of increasing natural gas and natural gas liquids (NGL) production in Texas and Colorado. The company is progressing with a large buildout of pipelines and processing facilities in both states, even as it awaits an election result in Colorado that could hinder certain projects. Industrial Info is tracking $2.8 billion in active DCP projects.
Click on the image at right for a breakdown of DCP projects by industry sector.
In the company's third-quarter conference call, DCP Chief Executive Officer Wouter van Kempen discussed growth in the company's regions of activity. Van Kempen said DCP has recently seen an approximately 35% increase in NGL throughput volumes year over year and a roughly 10% increase in gathering and processing volumes. "To capitalize on the current production resurgence, DCP is executing a focused, multi-year, multi-basin, multi-segment growth strategy that is mindful of the systemic overbuild our industry has created in past cycles," said van Kempen.
In the just-passed quarter, DCP successfully completed the construction of a third natural gas processing train at its Mewbourn plant in Colorado. The project added 200 million cubic feet per day of processing capacity, bringing total plant capacity to 435 million cubic feet per day. Van Kempen said DCP is now processing approximately 1 billion cubic feet of gas per day in Colorado. Saulsbury Industries (Odessa, Texas) provided engineering, procurement and construction (EPC) on the project, which had an estimated total investment value of $200 million. For more information, see Industrial Info's project report.
Van Kempen said DCP was progressing well with construction on another Colorado project, the O'Connor 2 plant near Kersey, Colorado. Construction on the project began this summer, and the facility has a targeted in-service date of second-quarter 2019. Saulsbury Industries also is providing EPC on the project. For more information, see Industrial Info's project report.
However, things may not be looking so rosy for another of the company's planned projects, the Bighorn natural gas processing plant near La Salle, Colorado, which could be affected by Colorado's Proposition 112, which would increase setbacks for oil and gas wells in Colorado to at least 2,500 feet from occupied buildings and vulnerable areas like parks and creeks. This would be up from the current setbacks of 500 feet from homes and 1,000 feet from schools. If passed, the proposition could end up curtailing oil and gas production in Colorado. For more information, see September 12, 2018, article - Coloradans Will Vote on New Oil & Gas Development in November.
"As we look to our twelfth plant in the [DJ] Basin, the Bighorn facility, we're prudently awaiting an FID [final investment decision]" pending the election result on November 6, said van Kempen. The facility would be built in stages, with the final processing capacity at 1 billion cubic feet per day. However, if Proposition 112 is passed, the plant scope could be more limited. Construction on the first 200 million-cubic-feet-per-day train could begin early next year. For more information, see Industrial Info's project report.
The company also is progressing with expansion of its Sand Hills NGL Pipeline in Texas. Van Kempen said, "Sand Hills underwent an incremental capacity expansion to 440,000 barrels per day (BBL/d) by the end of the third quarter and is expected to reach 485,000 BBL/d within the next two months, providing a clear line of sight to continued future margin growth. DCP could potentially construct loops on the Sand Hills Pipeline to increase carrying capacity up to 550,000 BBL/d by late next year. For more information, see Industrial Info's project report.
DCP also is a joint venture partner on the Gulf Coast Express natural gas pipeline in Texas, in which it holds a 25% share. The other partners are Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) (50%) and Targa Resources (NYSE:TRGP) (Houston) (25%). Van Kempen said the project was proceeding on schedule. The pipeline will transport up to 1.98 billion cubic feet per day of natural gas from the Permian Basin to the Agua Dulce, Texas, area. The project is planned for completion in late 2019. For more information, see Industrial Info's project reports on Spread 1, Spread 2 and spreads 3 and 4.
DCP reported third-quarter 2018 net income of $81 million, compared with a net loss of $20 million in third-quarter 2017.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Click on the image at right for a breakdown of DCP projects by industry sector.In the company's third-quarter conference call, DCP Chief Executive Officer Wouter van Kempen discussed growth in the company's regions of activity. Van Kempen said DCP has recently seen an approximately 35% increase in NGL throughput volumes year over year and a roughly 10% increase in gathering and processing volumes. "To capitalize on the current production resurgence, DCP is executing a focused, multi-year, multi-basin, multi-segment growth strategy that is mindful of the systemic overbuild our industry has created in past cycles," said van Kempen.
In the just-passed quarter, DCP successfully completed the construction of a third natural gas processing train at its Mewbourn plant in Colorado. The project added 200 million cubic feet per day of processing capacity, bringing total plant capacity to 435 million cubic feet per day. Van Kempen said DCP is now processing approximately 1 billion cubic feet of gas per day in Colorado. Saulsbury Industries (Odessa, Texas) provided engineering, procurement and construction (EPC) on the project, which had an estimated total investment value of $200 million. For more information, see Industrial Info's project report.
Van Kempen said DCP was progressing well with construction on another Colorado project, the O'Connor 2 plant near Kersey, Colorado. Construction on the project began this summer, and the facility has a targeted in-service date of second-quarter 2019. Saulsbury Industries also is providing EPC on the project. For more information, see Industrial Info's project report.
However, things may not be looking so rosy for another of the company's planned projects, the Bighorn natural gas processing plant near La Salle, Colorado, which could be affected by Colorado's Proposition 112, which would increase setbacks for oil and gas wells in Colorado to at least 2,500 feet from occupied buildings and vulnerable areas like parks and creeks. This would be up from the current setbacks of 500 feet from homes and 1,000 feet from schools. If passed, the proposition could end up curtailing oil and gas production in Colorado. For more information, see September 12, 2018, article - Coloradans Will Vote on New Oil & Gas Development in November.
"As we look to our twelfth plant in the [DJ] Basin, the Bighorn facility, we're prudently awaiting an FID [final investment decision]" pending the election result on November 6, said van Kempen. The facility would be built in stages, with the final processing capacity at 1 billion cubic feet per day. However, if Proposition 112 is passed, the plant scope could be more limited. Construction on the first 200 million-cubic-feet-per-day train could begin early next year. For more information, see Industrial Info's project report.
The company also is progressing with expansion of its Sand Hills NGL Pipeline in Texas. Van Kempen said, "Sand Hills underwent an incremental capacity expansion to 440,000 barrels per day (BBL/d) by the end of the third quarter and is expected to reach 485,000 BBL/d within the next two months, providing a clear line of sight to continued future margin growth. DCP could potentially construct loops on the Sand Hills Pipeline to increase carrying capacity up to 550,000 BBL/d by late next year. For more information, see Industrial Info's project report.
DCP also is a joint venture partner on the Gulf Coast Express natural gas pipeline in Texas, in which it holds a 25% share. The other partners are Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) (50%) and Targa Resources (NYSE:TRGP) (Houston) (25%). Van Kempen said the project was proceeding on schedule. The pipeline will transport up to 1.98 billion cubic feet per day of natural gas from the Permian Basin to the Agua Dulce, Texas, area. The project is planned for completion in late 2019. For more information, see Industrial Info's project reports on Spread 1, Spread 2 and spreads 3 and 4.
DCP reported third-quarter 2018 net income of $81 million, compared with a net loss of $20 million in third-quarter 2017.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
