US-based DCP Midstream (DCP) and Targa Resources Partners (Targa) have entered into an agreement for a long-term anchor commitment to the DCP Midstream Sandhills Pipeline.
The deal also calls for an interconnection of the Sandhills Pipeline to a new delivery point with Targa’s Cedar Bayou Fractionators (CBF) facility at Mont Belvieu in the U.S. state of Texas.
Under the agreement, a new, 100,000 barrels per day (bpd) fractionation expansion at the Targa-operated and majority-owned CBF facility will be undertaken.
DCP is in the process of securing right-of-way and environmental permits for the 700-mile Sandhills Pipeline which will transport Y-grade natural gas liquids (NGLs) from gas plants in the Permian Basin and South Texas.
The expansion will allow DCP to provide midstream energy services to handle producers increased liquid-rich natural gas production from the new Avalon Shale/Bone Springs areas, as well as the Eagle Ford Shale area.
The project is expected to be completed in the first quarter of 2013.
DCP Midstream is a 50:50 joint venture between Spectra Energy and ConocoPhillips.