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New Processing Plant Slated for Permian Basin

DCP Midstream LLC plans to build a 75 MMcf/d gas processing plant in Glasscock County, TX, and an associated low-pressure gathering system to service producers focused on the Wolfberry play in the Permian Basin of West Texas.

DCP said it would also expand its high-pressure gathering system as part of the project, linking its Goldsmith/Fullerton super system with its Triad super system.

The Rawhide Plant and the gathering systems are to optimize DCP's Permian super systems and are expected to be in commercial operation by the middle of 2013. The Rawhide Plant and the gathering systems would augment DCP's existing footprint in the Permian, where the company owns and operates 17 processing plants with a capacity of 1.25 Bcf/d and production of more than 135,000 b/d of natural gas liquids (NGL).

"Our strategy is to keep pace with the growth from this new phase of oil-driven development in the Permian," said Wouter van Kempen, president of DCP Midstream's gathering and processing business.

Oil-driven activity in Texas has led to an increase in gas flaring in the state, according to the Railroad Commission of Texas (RRC). In fiscal 2011 the RRC approved 651 permits to flare gas, more than double the 306 approved during the year-ago period (306), which was nearly double the number approved in fiscal 2009 (158) (see Shale Daily, Jan. 19).

The new DCP Midstream plant is the second phase of DCP's multiphase expansion program for the liquids-rich Permian that could also include construction of additional processing facilities in the region if producer drilling continues to accelerate, DCP Midstream said.

The program began with DCP Midstream's commitment to build the Sand Hills Pipeline, an NGL pipeline to provide takeaway service from the Permian to fractionation facilities along the Texas Gulf Coast and to the Mont Belvieu, TX, market hub by summer 2013 (see Shale Daily, Aug. 19, 2011).

Last summer Southern Union Gas Services announced plans to construct a 200 MMcf/d processing plant and associated gathering, compression and treating facilities to serve growing production from the Avalon, Bone Spring and Wolfcamp plays of West Texas and Southeast New Mexico (see Shale Daily, Aug. 24, 2011).

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