DCP Midstream is moving ahead with the Sand Hills Pipeline to carry natural gas liquids (NGL) from the Permian Basin and Eagle Ford Shale to markets along the Gulf Coast.
The DCP Midstream board has approved the project, it said Thursday. Planning and field work have been under way for several months, and with board approval construction is to accelerate. An open season for the project was held late last year (see Shale Daily, Nov. 24, 2010).
Sand Hills is to consist of about 720 miles of 20-inch diameter pipeline with an initial capacity of 200,000 b/d, which could grow to 350,000 b/d with the addition of pumping stations. Sand Hills will be phased into service, with the first phase completed by the third quarter of 2012 to accommodate DCP Midstream's Eagle Ford volumes. Service to the Permian Basin is to be available as early as the second quarter of 2013.
"DCP will support Sand Hills with a significant commitment for capacity to ship DCP's growing Permian and Eagle Ford NGL production," said Bill Waldheim, DCP Midstream northern business unit president. "As the largest NGL producer in the Permian and with a growing processing position in the Eagle Ford, DCP has a strategic imperative to provide an industry solution to the growing capacity bottlenecks..."
The company said it will operate Sand Hills as a common carrier and will provide interconnects with NGL infrastructure in both the Permian and the Eagle Ford. In the Gulf Coast, Sand Hills has been routed to provide interconnectivity with multiple planned and existing fractionation and storage facilities in and around Mont Belvieu, TX, providing shippers with optionality, choice and reliability of service, DCP Midstream said. In parallel with Sand Hills, DCP Midstream continues to move forward with processing capacity additions in both the Permian and Eagle Ford.
Earlier this year Targa Resources Partners LP made an anchor commitment to Sand Hills that includes an interconnection with Targa's Cedar Bayou Fractionators LP facility at Mont Belvieu (see Shale Daily, May 11).