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Released August 08, 2019 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Through a series of strategic growth projects and pending acquisitions, DCP Midstream LP (NYSE:DCP) (Denver, Colorado) is expanding its transmission, natural gas processing and fractionation capacity in Colorado's DJ Basin and Texas. Industrial Info is tracking more than $2.5 billion in active DCP projects, not including joint ventures and planned acquisitions.
In the company's recent quarterly earnings conference call, Chief Executive Officer Wouter van Kempen discussed the company's growth strategy. Among DCP's recently completed projects is the O'Connor 2 natural gas processing plant, which began service earlier this week in Kersey, Colorado. The facility adds 200 million cubic feet per day of processing capacity, bringing total capacity at the O'Connor plant to 360 million cubic feet per day. Construction began in the summer of 2018, with Saulsbury Industries (Odessa, Texas) providing engineering, procurement and construction (EPC). For more information, see Industrial Info's project report. Van Kempen said the facility brings DCP's total processing and bypass capacity in the DJ Basin to more than 1.3 billion cubic feet per day.
Also in the DJ Basin, DCP reached an agreement with Western Midstream Partners LP (NYSE:WES) (The Woodlands, Texas) for an incremental 225 million cubic feet per day of processing capacity at Western Midstream's DJ Basin gas processing complex in Fort Lupton, Colorado. For more information, see Industrial Info's plant profile. The resulting natural gas liquids (NGL) will be transported on DCP's Southern Hills Pipeline, which DCP is expanding by 40,000 barrels per day (BBL/d), bringing total capacity to 230,000 BBL/d.
Van Kempen said the agreement eliminates the need to spend capital at the proposed Big Horn natural gas processing plant in La Salle, Colorado. The chief executive said, "This ... allows us to significantly reduce our 2020 growth capital by utilizing this third-party infrastructure." However, DCP is keeping the option for its own grassroot complex. "With permits and land already secured, we preserve the optionality to build future capacity via the Big Horn facility if customer demand requires it," said van Kempen.
In Texas, DCP is expanding pipeline capacity with its Gulf Coast Express natural gas pipeline, which it is constructing with Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) and others. The pipeline will carry up to 2 billion cubic feet per day of gas from the Permian Basin to the Texas Gulf Coast. Van Kempen said, "In the Permian, the Gulf Coast Express Pipeline is expected to come online slightly ahead of schedule, with an anticipated in-service date at the end of September." For more information, see Industrial Info's project reports on Spread 1, Spread 2, and spreads 3 and 4.
Among DCP's other Texas projects is the expansion of the Texas Express and Front Range NGL pipeline systems, which it is constructing with Enterprise Products Partners (NYSE:EPD) (Dallas, Texas) and that van Kempen said would be in service in the fourth quarter of this year. The project entails constructing new pump stations on the system to increase capacity from Cushing, Oklahoma, to Mont Belvieu, Texas. For more information, see Industrial Info's project reports on the pump stations in Skellytown, Crowell, Hammond and Springtown.
While DCP's 2020 capital expenditures for growth projects may be lowered, the company could be spending capital on its options to acquire pipeline and fractionation capacity from Tallgrass Energy Partners (NYSE:TGE) (Leawood, Kansas) and Phillips 66 (NYSE:PSX) (Houston). DCP has the option to acquire 33% of Tallgrass' Cheyenne Connector natural gas pipeline in Colorado and 30% of two fractionators being constructed at Phillips 66's Sweeny Hub in Texas.
The Cheyenne Connector will carry up to 600 million cubic feet per day of gas to interconnect with Tallgrass' Rockies Express Pipeline. Construction began earlier this year and is expected to be completed in the first half of 2020. For more information, see Industrial Info's project report and July 30, 2019, article - Tallgrass Energy Wraps Up Strong Quarter with More Than $4.7 Billion in Active Projects.
Phillips 66's second and third fractionators at its Sweeny Hub will have a combined capacity of 300,000 BBL/d. DCP has the option to acquire up to a 30% ownership of the two fractionators for approximately $400 million at their in-service date, which is expected in late 2020. For more information, see Industrial Info's project reports on Fractionator 2 and Fractionator 3 as well as July 29, 2019, article - Phillips 66 Progresses with 'Robust Portfolio of Midstream Growth Projects'.
Van Kempen said most of DCP's 2019 capital expenditures had been weighted in the first half of the year through the O'Connor 2 and Gulf Coast Express projects. Van Kempen said DCP's previous guidance for growth project expenditures in 2019 remained unchanged, at $600 million to $800 million.
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.
In the company's recent quarterly earnings conference call, Chief Executive Officer Wouter van Kempen discussed the company's growth strategy. Among DCP's recently completed projects is the O'Connor 2 natural gas processing plant, which began service earlier this week in Kersey, Colorado. The facility adds 200 million cubic feet per day of processing capacity, bringing total capacity at the O'Connor plant to 360 million cubic feet per day. Construction began in the summer of 2018, with Saulsbury Industries (Odessa, Texas) providing engineering, procurement and construction (EPC). For more information, see Industrial Info's project report. Van Kempen said the facility brings DCP's total processing and bypass capacity in the DJ Basin to more than 1.3 billion cubic feet per day.
Also in the DJ Basin, DCP reached an agreement with Western Midstream Partners LP (NYSE:WES) (The Woodlands, Texas) for an incremental 225 million cubic feet per day of processing capacity at Western Midstream's DJ Basin gas processing complex in Fort Lupton, Colorado. For more information, see Industrial Info's plant profile. The resulting natural gas liquids (NGL) will be transported on DCP's Southern Hills Pipeline, which DCP is expanding by 40,000 barrels per day (BBL/d), bringing total capacity to 230,000 BBL/d.
Van Kempen said the agreement eliminates the need to spend capital at the proposed Big Horn natural gas processing plant in La Salle, Colorado. The chief executive said, "This ... allows us to significantly reduce our 2020 growth capital by utilizing this third-party infrastructure." However, DCP is keeping the option for its own grassroot complex. "With permits and land already secured, we preserve the optionality to build future capacity via the Big Horn facility if customer demand requires it," said van Kempen.
In Texas, DCP is expanding pipeline capacity with its Gulf Coast Express natural gas pipeline, which it is constructing with Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) and others. The pipeline will carry up to 2 billion cubic feet per day of gas from the Permian Basin to the Texas Gulf Coast. Van Kempen said, "In the Permian, the Gulf Coast Express Pipeline is expected to come online slightly ahead of schedule, with an anticipated in-service date at the end of September." For more information, see Industrial Info's project reports on Spread 1, Spread 2, and spreads 3 and 4.
Among DCP's other Texas projects is the expansion of the Texas Express and Front Range NGL pipeline systems, which it is constructing with Enterprise Products Partners (NYSE:EPD) (Dallas, Texas) and that van Kempen said would be in service in the fourth quarter of this year. The project entails constructing new pump stations on the system to increase capacity from Cushing, Oklahoma, to Mont Belvieu, Texas. For more information, see Industrial Info's project reports on the pump stations in Skellytown, Crowell, Hammond and Springtown.
While DCP's 2020 capital expenditures for growth projects may be lowered, the company could be spending capital on its options to acquire pipeline and fractionation capacity from Tallgrass Energy Partners (NYSE:TGE) (Leawood, Kansas) and Phillips 66 (NYSE:PSX) (Houston). DCP has the option to acquire 33% of Tallgrass' Cheyenne Connector natural gas pipeline in Colorado and 30% of two fractionators being constructed at Phillips 66's Sweeny Hub in Texas.
The Cheyenne Connector will carry up to 600 million cubic feet per day of gas to interconnect with Tallgrass' Rockies Express Pipeline. Construction began earlier this year and is expected to be completed in the first half of 2020. For more information, see Industrial Info's project report and July 30, 2019, article - Tallgrass Energy Wraps Up Strong Quarter with More Than $4.7 Billion in Active Projects.
Phillips 66's second and third fractionators at its Sweeny Hub will have a combined capacity of 300,000 BBL/d. DCP has the option to acquire up to a 30% ownership of the two fractionators for approximately $400 million at their in-service date, which is expected in late 2020. For more information, see Industrial Info's project reports on Fractionator 2 and Fractionator 3 as well as July 29, 2019, article - Phillips 66 Progresses with 'Robust Portfolio of Midstream Growth Projects'.
Van Kempen said most of DCP's 2019 capital expenditures had been weighted in the first half of the year through the O'Connor 2 and Gulf Coast Express projects. Van Kempen said DCP's previous guidance for growth project expenditures in 2019 remained unchanged, at $600 million to $800 million.
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.
