DCP Midstream Announces Renewed Long-Term Fee-Based Contract for New Zia II Permian Plant
Release date: 10/13/2015
DENVER -- Today, DCP Midstream, LLC announced a 10-year renewal of a contract with one of the largest investment grade independent producers in the prolific Delaware basin, a sub-basin of the Permian. The contract has been converted from percentage of proceeds to 100 percent fee-based and covers approximately one million dedicated acres.
With the startup of the 200 million cubic foot per day Zia II natural gas plant in August, DCP Midstream now owns and operates an integrated system of five natural gas processing plants with approximately 650 MMcf/d of total capacity in the region. As the largest overall gas processor in the Permian basin, DCP Midstream is also one of the largest midstream operators in the developing Delaware basin.
“With the ramp-up of the Zia II plant and our recently completed Lea County extension to our Sand Hills Pipeline, we continue to provide much needed capacity and reliable takeaway for our customers in the Delaware basin, which is one of the most economic producing basins in the country,” said Wouter van Kempen, chairman and CEO of DCP Midstream. “This one million acre renewal improves our contract portfolio mix by providing sustainable fee-based earnings with reduced overall commodity exposure.”
“This agreement is a great example of DCP Midstream partnering with our producers to create win-win scenarios in the current environment,” said Don Baldridge, president of commercial for DCP Midstream.
DCP Midstream, LLC leads the midstream segment as the largest natural gas processor, the largest natural gas liquids producer and one of the largest marketers in the U.S. DCP Midstream operates in 17 states across major producing regions. The company is a 50:50 joint venture between Phillips 66 and Spectra Energy. It owns the general partner of DCP Midstream Partners, LP (NYSE:DPM), a master limited partnership, and provides operational and administrative support to the partnership. DCP Midstream is the largest oil and gas company and the largest private company in Denver, the city of its headquarters. For more information, visit the DCP Midstream website at www.dcpmidstream.com.