Source: DCP Midstream
DCP Midstream (NYSE:DPM) has signed a precedent agreement with Trunkline Gas pipeline whereby DCP Midstream will be the anchor shipper on a modified portion of the Trunkline system in South Texas focusing on Eagle Ford shale production.
Trunkline will be seeking a change in the operation of the southernmost segment of its pipeline in Texas to serve DCP Midstream’s gathering of liquids-rich gas, primarily serving the Eagle Ford shale trend in South Texas. As proposed, Trunkline would isolate its south Texas system at the Edna Compressor Station in Jackson County, Texas, and modify its facilities to allow bi-directional flow and the transportation of liquids-rich gas. Trunkline will also seek Federal Energy Regulatory Commission (FERC) approval to increase the minimum and maximum Btu requirements in its gas tariff.
DCP Midstream owns and controls over 800 mmcf/d of gas processing capacity and associated fractionation within South Texas among five plants. Three DCP Midstream plants currently access Trunkline and DCP will build approximately 29 miles of gathering pipeline to connect the remaining plants to leverage 165 miles of the Trunkline system. Trunkline will then act as a backbone for creating a DCP Midstream processing super-system within South Texas providing greater flexibility and capability to DCP’s customers. DCP Midstream will further upgrade its processing plants to maximize throughput of the richer Eagle Ford gas and will look to add additional plant capacity over time. DCP Midstream currently has over 250 mmcf/d of available processing and associated fractionation capacity available in the area that Trunkline will serve to integrate.
“We are very excited to work with Trunkline to provide an immediate solution that builds on DCP Midstream’s existing footprint in the Eagle Ford basin,” said Tom O’Connor, chairman, president and CEO of DCP Midstream. “This transaction supports DCP Midstream’s strategy of leveraging existing processing infrastructure around the Eagle Ford area to provide producers with faster access to residue gas and natural gas liquids markets, and has room to be scalable for future growth. This Eagle Ford initiative complements DCP Midstream’s in-flight expansions in the liquids rich DJ/Niobrara, Wolfberry, Granite Wash, and Avalon shale plays,” said O’Connor.
DCP Midstream currently has over 125,000 acres of Eagle Ford production dedicated to its facilities.
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 in the U.S. DCP Midstream operates in 18 States across major producing regions. DCP Midstream is an equally owned 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.