DCP Midstream said that the Southern Hills natural gas liquids (NGL) pipeline will be extended to connect the DJ Basin to Cushing, Oklahoma and beyond through the White Cliffs pipeline.
SemGroup, the operator of White Cliffs, plans to convert a portion of their pipeline system to NGL service and interconnect with Southern Hills.
The pipeline conversion and connection with Southern Hills will provide an additional option for NGL takeaway to meet the growing needs of Colorado’s prolific DJ Basin.
As announced in DCP’s first quarter 2018 earnings release, this project is part of DCP’s larger, multi-year planned growth strategy, including up to 1.5 BCF per day of incremental processing and bypass capacity, and additional NGL and gas takeaway capacity.
DCP Midstream chairman, president and CEO Wouter van Kempen said: “DCP is excited to join SemGroup in this critical project, as we provide necessary NGL takeaway infrastructure to our comprehensive integrated DJ Basin growth plan.
“The White Cliffs conversion and connection with our Southern Hills pipeline will tie the DJ Basin to the Gulf Coast market centers of Mont Belvieu, Sweeny, and beyond. This is another high return, capital efficient solution driving increased volumes and utilization on Southern Hills.”
SemGroup plans to convert one of their 12-inch-diameter pipelines from crude service to NGL Y-grade service connecting the DJ Basin to Cushing, Oklahoma. The pipeline is expected to have a total capacity of 90,000 barrels per day, expandable to 120,000 barrels per day, and is scheduled to be in service during the fourth quarter of 2019.
As part of the project, SemGroup plans to construct a 12-mile extension of White Cliffs Pipeline south of Cushing to interconnect with Southern Hills, which is owned two-thirds by DCP, and one-third by Phillips 66 Partners LP (NYSE:PSXP).
Additionally, DCP plans to construct a 25-mile pipeline in the DJ Basin, connecting its system to White Cliffs. DCP and Southern Hills have entered into 10-year agreements providing up to 50,000 barrels per day transport.
White Cliffs and Southern Hills plan to jointly conduct a binding open season to attract additional volumes from producers and processers, with shippers moving NGLs under a published joint tariff between the two carriers.
Source: Company Press Release.