DCP Midstream, LP today announced the planned divestiture of its Douglas gathering system in Wyoming, which includes approximately 1,500 miles of gathering lines, to Tallgrass Energy Partners, LP for approximately $128 million, subject to customary closing adjustments. The transaction is expected to close on or before the end of the quarter.
The proceeds from this transaction will be used to fund its strategic organic growth projects around DCP Midstream’s premier footprint, such as potential expansions of the Sand Hills NGL pipeline in the Permian and additional processing capacity and gathering systems in the DJ Basin.
“We are continuing to strategically high-grade our portfolio by divesting non-core assets and redeploying the cash into strong return, lower risk, accretive fee-based projects that are already in-flight or in development,” said Wouter van Kempen, chairman, president and CEO of DCP Midstream. “We are excited about our growth opportunities that continue to extend our integrated midstream value chain and optimize our footprint.”
The transaction has been approved by appropriate governing bodies of both companies, but remains subject to satisfaction of specified closing conditions, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.