DCP Midstream (ticker: DCP) announced this week it will be expanding its Sand Hills natural gas liquids pipeline by 85 MBPD up to approximately 450 MBPD. DCP will be investing $105 million towards long lead equipment and securing right of way, according to its press release.
The expansion will include partial looping and the addition of seven new pump stations. The expansion is expected to cost approximately $500 million and the pipeline will be in service until the second half of 2018.
The company announcement also mentioned another phase of the expansion which is expected to include the addition of a full loop of Sand Hills, intended to bolster capacity by 100 MBPD.
The pipeline is meant to take advantage of new growth stemming from the Delaware and Permian basins. The project will be partially funded by the proceeds from DCP’s divestiture of its Douglas, Wyoming natural gas gathering system, which was considered a non-core asset.
Two thirds of the Sand Hills Pipeline is owned by DCP, and the remaining third is owned by Phillips 66 Partners LP (ticker: PSXP).
