DCP Midstream To Build Eighth Processing Plant In DJ Basin

Due to increased production out of the DJ Basin and Niobrara shale, DCP Midstream LLC announced it will build the $270 million LaSalle cryogenic natural gas processing plant along with an associated gathering system in Weld County, Colorado.

The 110 million cubic feet per day (MMcf/d) plant will be the company’s eighth plant in the region when it is completed in mid-2013.

“We’re adding larger diameter, high-pressure gathering lines in the greater Wattenberg field area to increase capacity on our older gathering system from the ‘70s and ‘80s and lower the pressure in the field itself, which producers believe will help the wells perform better,” Bill Waldheim, president of the company’s northern business unit, told Midstream Monitor.

He added that the plant is expanding the super-system with enough capacity to handle all of the gas that can be produced from the two plays. Once complete the system will have a total processing capacity of 510 MMcf/d.

“These high-pressure lines are going to be laid in an area where we can continue to improve on the system as the processing capacity is increased,” he said.

The newer gathering trunklines are being added along the perimeter of the basin with one being added to the north and west of the proposed site for the LaSalle plant. This site was selected due to the amount of new permitting and activity in the area.

“Traditionally there have been a lot of vertical wells drilled in the field that would generally be considered pretty small, but the addition of horizontal drilling and its increased production has increased the need for larger diameter gathering in the area,” Waldheim said.

The LaSalle plant will connect to the other plants in the region’s super-system. “In the future, should we want to optimize the field, we can shut down some of the less efficient plants and further depend on the newer, more efficient plants with ethane extraction capabilities. For now we need all of them running due to the amount of production out of the basin,” he said.

DCP Midstream’s strategy in the basin continues to be driven by producer activity with the company attempting to stay ahead of producer demand. The addition of this new deep-cut cryogenic capacity follows this path since producers have created better natural gas liquids (NGL) takeaway capacity. Combined with the recently completed Mewborne plant, the LaSalle plant will represent 225 MMcf/d of cryogenic capacity being added to the region in a short period of time.

“I think we have enough gas and NGL takeaway in the region. As you go more deep-cut cryogenic, we’ve been installing amine systems to get the CO₂ out of the gas. We’ve had cryogenic capacity on the ground, but we’ve never been able to go deep-cut ethane because we haven’t had the NGL takeaway,” he said. This NGL takeaway is allowing the company to go deep-cut at its Lucerne, Mewborne, Platteville and Roggen plants in addition to the new LaSalle plant.

The Lucerne plant has a capacity of 40 MMcf/d, Mewborne is 125 MMcf/d, Platteville is 65 MMcf/d and Roggen has a capacity of 70 MMcf/d. The other plants in the system are the Eaton plant at 10 MMcf/d; Greeley at 30 MMcf/d; and Spindle at 40 MMcf/d. Gas processed at the DCP Midstream plants in the area will be directed to the Colorado Interstate Gas pipeline system to serve Colorado and the Mid-Continent.