DCP Midstream, LP has announced an additional large scale expansion of the Sand Hills NGL Pipeline, with plans to initially spend $105 million towards long-lead equipment and right-of-way.
This expansion is designed to initially increase capacity by 85,000 bpd up to approximately 450,000 bpd. This first phase will include partial looping of the pipeline and the addition of seven new pump stations at an estimated total cost of $500 million. The expected in-service date is the second half of 2018. Additionally, future expansion may include adding a full loop of Sand Hills, which could raise capacity by over 100,000 bpd to a minimum of 550,000 bpd.
In January, DCP Midstream announced plans to expand the Sand Hills Pipeline’s existing capacity to 365,000 bpd, which is on target to be finished in the fourth quarter of 2017. This expansion will add three additional pump stations and a lateral to increase Permian capacity and is backed by long-term, third party plant dedications. In addition, multiple new supply connectors are in progress and will deliver incremental NGL volumes in 2017 and beyond.
“DCP is uniquely situated through its premier integrated logistics and G&P footprint to capture growth out of the Delaware and Permian basins,” said Wouter van Kempen, chairman, president and CEO of DCP Midstream. “We continue to high-grade our strategic portfolio to focus on strong return, accretive, fee-based growth projects at lower risk. The Sand Hills Pipeline has been an incredible success story founded upon being a producer-friendly pipe that offers flexibility and optionality through our multiple delivery points serving the Gulf Coast. With our phased expansion approach, we are able to match capital outlay with supply growth.”