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DCP Midstream Inks Another Deal for Texas NGL Pipeline

DCP Midstream LLC and West Texas LPG Pipeline LP (WTLPG) have struck long-term agreements for natural gas liquids (NGL) gathering services for the DCP Midstream Sandhills Pipeline LLC through two new interconnects with WTLPG.

"We see this as a very cost-effective, highly efficient and timely way to integrate the Sandhills Pipeline with existing and planned gas processing facilities," said Bill Waldheim, president of DCP's northern business unit. "Sandhills will provide extensive access to Gulf Coast NGL markets."

DCP Midstream began an open season in November (see Shale Daily, Nov. 24, 2010) and is in the process of securing right-of-way and environmental permits for the Sandhills Pipeline. The new 700-mile system would transport Y-grade NGLs from gas plants in the Permian Basin and South Texas to the various fractionator facilities along the Gulf Coast along with the Mont Belvieu, TX, NGL hub.

Targa Resources Partners LP said last month it had committed to be an anchor shipper on Sandhills (see Shale Daily, May 11).

Sandhills would serve NGL transportation needs of gas processing plants and shippers in West Texas and South Texas, including DCP Midstream gas plants and the new 200 MMcf/d DCP Eagle gas plant designed to serve Eagle Ford Shale gas development. In addition, DCP is securing long-term commitments from other third-party shippers.

WTLPG has facilities that access liquids-rich natural gas from West Texas and New Mexico that would be delivered to the two planned receipt points on Sandhills Pipeline.

The projects are expected to be completed in the first half of 2013.

Also on Thursday DCP Midstream said it is buying Seaway Products Pipeline Co. from ConocoPhillips in order to create NGL transportation capacity from the Midcontinent to higher-value markets on the Texas Gulf Coast (see related story).

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