DCP Midstream Partners Joins Texas Express Pipeline JV

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
$85.0MM
Description

Bought 10% stake in Texas Express Pipeline, which extends 580 miles from Skellyton, TX to Mont Belvieu, TX.

DCP Midstream Partners LP, Denver, (NYSE: DPM) has acquired a 10% ownership interest in the Texas Express Pipeline from Enterprise Products Partners LP (NYSE: EPD) in exchange for a $85-million in the joint venture.

Enterprise and Enbridge Energy Partners LP (NYSE: EEP) will each own 35% interest in the joint venture, while Anadarko Petroleum Corp. (NYSE: APC) will have a 20% stake.

Additionally, DCP Midstream Partners affiliate DCP NGL Services LLC has committed 20,000 barrels per day to Texas Express Pipeline, increasing total long term shipper commitments on Texas Express Pipeline from 232,000 barrels per day to 252,000 barrels per day.

Originating near Skellytown in Carson County, Texas, the 20-inch diameter Texas Express Pipeline mainline will extend approximately 580 miles to Enterprise’s natural gas liquids fractionation and storage complex at Mont Belvieu, Texas, and will provide access to other third-party facilities in the area. The pipeline will provide much-needed takeaway capacity for producers in West Texas, the Rockies, southern Oklahoma and the Midcontinent area, giving them access to the largest NGL market along the Gulf Coast and the opportunity to maximize the value of their NGLs.

Production from the Rockies, Permian Basin and Midcontinent will be delivered into Texas Express Pipeline through Enterprise’s existing Mid-America Pipeline System, which extends north through Oklahoma into Conway, Kansas and south into the Permian Basin. The pipeline is expected to be completed by the second quarter of 2013.

“Underpinned by long-term ship-or-pay transportation agreements, which include unaffiliated shippers, this project will support our continued distribution growth, provide fee-based margins, and further diversify our asset portfolio,” says, Mark Borer, president and chief executive officer of DCP Midstream Partners. “Our partnership with Enterprise, Enbridge and Anadarko provides an infrastructure solution for much-needed takeaway capacity and market choices for producers and our general partner, DCP Midstream, LLC.”