Profile: DCP Midstream Partners LP (DPM)
18 Dec 2013
DCP Midstream Partners, LP, incorporated on August 5, 2005, is engaged in the business of gathering, compressing, treating, processing, transporting, storing and selling natural gas; transporting, storing and selling propane in wholesale markets, and producing, fractionating, transporting, storing and selling natural gas liquids (NGLs) and condensate. Its operations are organized into three business segments: Natural Gas Services, Wholesale Propane Logistics and NGL Logistics. In April 2012, it completed the dropdown of the remaining 66.67% interest in DCP Southeast Texas Holdings, GP from the owner of its general partner, DCP Midstream, LLC. In July 2012, the Company completed the acquisition of the Crossroads system from Penn Virginia Resource Partners, L.P. In April 2013, it raised its stake to 80% from 33.33% by acquiring a further 46.67% stake in DCP SC Texas GP. In January 2012, we acquired the remaining 49.9% of the limited liability company interests in East Texas from DCP Midstream, LLC.
Natural Gas Services Segment
The Company’s Natural Gas Services segment consists of a geographically diverse complement of assets and ownership interests that provide an array of market services for its producer customers. These services include gathering, compressing, treating, processing, fractionating, transporting and storing natural gas. Natural Gas Services Segment operates in seven states in the continental United States: Arkansas, Colorado, Louisiana, Michigan, Oklahoma, Texas and Wyoming. The assets in these states include its Northern Louisiana system (including the Minden, Ada and Pelico systems), its Southern Oklahoma system (Lindsay system), its 40% equity interest in the Discovery system located off and onshore in Southern Louisiana, its 50.1% operating interest in the East Texas system, its 75% operating interest in its Colorado system (Collbran system), its Wyoming system (Douglas system), its Michigan system, and its 33.33% equity interest in the Southeast Texas system. The East Texas and Southeast Texas systems provide operating synergies and opportunities for growth in conjunction with DCP Midstream, LLC. Its Natural Gas Services segment consists of approximately 5,300 miles of pipe, seven processing plants, five treating plants, two natural gas storage facilities and five NGL fractionation facilities. The seven processing plants that service its natural gas gathering systems include sixteen cryogenic facilities with approximately 1,865 million cubic feet of gas per day of processing capacity and one refrigeration facility with approximately 45 million cubic feet of gas per day of processing capacity. The natural gas storage facilities include 850 million cubic feet of gas of leased storage on its Pelico system.
The Company’s Northern Louisiana system includes its Minden and Ada systems, which gather natural gas from producers and deliver it for processing to the processing plants. It also includes its Pelico system, which stores natural gas and transports it to markets. Its Northern Louisiana system has market outlets for the natural gas it gathers, including several intrastate and interstate pipelines, industrial end-users and power plants. The system is located to facilitate the transportation of natural gas from Texas and northern Louisiana to pipeline connections linking to markets in the eastern areas of the United States.
The Company’s Minden processing plant is a cryogenic natural gas processing and treating plant located in Webster Parish, Louisiana. Its Ada gathering system is located in Bienville and Webster Parish in Louisiana and the Ada processing plant is a refrigeration natural gas processing plant located in Bienville Parish, Louisiana. Its Pelico system is an intrastate natural gas gathering and transportation pipeline that gathers and transports natural gas. Additionally, the Pelico system transports processed gas from the Minden and Ada processing plants and natural gas supplied from third party interstate and intrastate natural gas pipelines. The Pelico system also receives natural gas produced in Texas through its interconnect with other pipelines that transport natural gas from Texas into western Louisiana. The Pelico system leases 850 million cubic feet of gas of storage capacity from a third party. Its Southern Oklahoma system is located in the Golden Trend area of McClain, Garvin and Grady counties in southern Oklahoma. Its Colorado system is consist of a 75% operating interest in Collbran Valley Gas Gathering, LLC (Collbran), and consists of assets in the southern Piceance Basin that gather natural gas at high pressure from over 20,000 dedicated and producing acres in western Colorado. Its Wyoming system consists of over 1,300 miles of natural gas gathering pipelines that cover more than 4,000 square miles in the Powder River Basin in Wyoming. The system gathers primarily rich casing-head gas from oil wells at low pressure and delivers the gas to a third party for processing under a fee agreement. Its Michigan system consists of four natural gas treating plants and an approximately 330-mile gas gathering pipeline system with throughput capacity of 455 million cubic feet of gas per day; an approximately 55-mile residue gas pipeline, or Bay Area pipeline; a 75% interest in Jackson Pipeline Company, a partnership owning an approximately 25-mile residue pipeline, and a 44% interest in the 30-mile Litchfield pipeline.
The Company has a 40% interest in Discovery, with the remaining 60% owned by Williams Partners, L.P. The Discovery system includes a natural gas gathering and transportation pipeline system located primarily off the coast of Louisiana in the Gulf of Mexico, with six delivery points connected to interstate and intrastate pipeline systems; a cryogenic natural gas processing plant in Larose, Louisiana; a fractionator in Paradis, Louisiana, and an NGL pipeline connecting the gas processing plant to the fractionator.
The Company has a 50.1% consolidating interest in East Texas. Its East Texas system gathers, transports, treats, compresses and processes natural gas and NGLs. Its East Texas facility may also fractionate NGL production, which can be marketed at nearby petrochemical facilities. Its East Texas system, located near Carthage, Texas, includes a natural gas processing complex that is connected to its gathering system, as well as third party gathering systems. The complex includes the Carthage Hub, which delivers residue gas to interstate and intrastate pipelines and acts as a key exchange point for the purchase and sale of residue gas in the eastern Texas region. The East Texas system consists of approximately 900 miles of pipe, processing capacity of 780 million cubic feet of gas per day and fractionation capacity of 11 million cubic feet of gas per day. The Southeast Texas system is a fully integrated midstream business which includes 675 miles of natural gas pipelines, three natural gas processing plants in Liberty and Jefferson Counties with recently increased processing capacity of 400 MMcf/d and natural gas storage assets in Beaumont with eight Billion cubic feet of existing storage capacity.
Wholesale Propane Logistics Segment
The Company operates a wholesale propane logistics business in the states of Connecticut, Maine, Massachusetts, New Hampshire, New York, Ohio, Pennsylvania, Rhode Island, Vermont and Virginia. Its operations include one owned propane marine import terminal with storage capacity of 476 thousand barrels, one leased propane marine terminal with storage capacity of 424 thousand barrels, one propane pipeline terminal with storage capacity of 56 thousand barrels, six owned propane rail terminals with aggregate storage capacity of 21 thousand barrels. and access to several open access pipeline terminals. The Company owns its rail terminals and lease the land on which the terminals are situated under long-term leases, except for the York terminal where it owns the land. Its leased marine terminal is on a long-term lease agreement. Each of our rail terminals consist of two to three propane tanks with capacity of between 120,000 and 270,000 gallons for storage, and two high volume racks for loading propane into trucks.
The Company’s wholesale propane business has a strategic network of supply arrangements under annual and multi-year agreements under index-based pricing. Its primary suppliers of propane include a subsidiary of DCP Midstream, LLC, Aux Sable Liquid Products LP, Spectra Energy and BP Canada. The Company also purchases propane supply from natural gas fractionation plants and crude oil refineries located in the Texas and Louisiana Gulf Coast. Through this process, the Company takes custody of the propane and either sell it in the wholesale market or store it at its facilities. The Company has supply contracts with Spectra Energy for both marine terminals.
NGL Logistics Segment
The Company operates its NGL Logistics business in the states of Louisiana, Texas, Colorado, Kansas and Michigan. Its NGL pipelines transport NGLs from natural gas processing plants to fractionation facilities, a petrochemical plant and a third party underground NGL storage facility. Its pipelines provide transportation services to customers on a fee basis. Its facility serves regional refining and petrochemical demand, and helps to balance the seasonality of propane distribution in the midwestern and northeastern United States and in Sarnia, Canada. The Company provides services to customers primarily on a fee basis.
The Seabreeze intrastate NGL pipeline is approximately 56 miles long, has capacity of 41 thousand barrels per day. The Seabreeze pipeline, located in Texas, delivers NGLs to a third-party processing plant with capacity of approximately 340 million cubic feet of gas per day located in Matagorda County and an NGL pipeline. The Seabreeze pipeline is thesole NGL pipeline for one processing plant and is the delivery point for two NGL pipelines. The Wilbreeze intrastate pipeline, located in Texas, is approximately 39 miles long, has a capacity of 11 thousand barrels per day.
The Wattenberg interstate NGL pipeline is approximately 480 miles long and has capacity of 22 thousand barrels per day. It originates in the Denver-Julesburg, or DJ, Basin in Colorado and terminates near the Conway hub in Bushton, Kansas. The pipeline is connected to two DCP Midstream, LLC plants and two third party plants. The Black Lake interstate NGL pipeline is approximately 317 miles long, has capacity of 40 thousand barrels per day. The Black Lake pipeline receives NGLs from two natural gas processing plants in northern Louisiana, including its Minden plant and Regency Intrastate Gas, LLC’s Dubach processing plant. The Black Lake pipeline is the sole NGL pipeline for these natural gas processing plants.
NGL Fractionation Facilities
The Company’s DJ Basin NGL fractionators in Colorado are located on DCP Midstream, LLC’s processing plant sites and are operated by DCP Midstream, LLC, gatherers and processors in the DJ Basin, who delivers NGLs to the fractionators under a long-term fractionation agreement. Its NGL fractionation facilities in Mont Belvieu, Texas consist of the Enterprise fractionator operated by Enterprise Products Partners L.P., of which it acquired a 12.5% interest in July 2012, and the Mont Belvieu 1 fractionator operated by ONEOK Partners, of which it acquired a 20% interest in July 2012. The Company NGL storage facility is located on 620 acres of land in Marysville, Michigan and includes nine underground salt caverns with approximately 7 one million barrels of storage capacity and rail, truck and pipeline connections providing an important supply point for refiners, petrochemical plants and wholesale propane distributors in the Sarnia, midwestern and northeastern markets, including its Wholesale Propane business.
DCP Midstream Partners LP
Suite 2500, 370 17th Street
DENVER CO 80202