TULSA, Okla. -- DCP Midstream, the privately held joint venture between Phillips 66 and Spectra Energy, has seen tremendous growth in the Midcontinent. In 2013 alone, the company, which is the largest gas processor in terms of volume and the largest natural gas liquid (NGL) producer, added almost a billion cubic feet of capacity per day across the Mississippi Lime, Granite Wash and South Central Oklahoma Oil Province (SCOOP) plays. But instead of moving barrels of NGLs to the storage and fractionation hub at Conway, Kan., which services the Midcontinent region, the company prefers to send them south, to Mont Belvieu, Texas.

“From a pipeliner’s perspective, I want to take barrels to where I think I can move barrels,” Richard Bradsby, vice president, Midcontinent Business Unit at DCP Midstream, told the audience at Hart Energy’s DUG Midcontinent conference earlier this month. “And continuing to move our growing capacity in Conway proved not to be effective. So our focus was to develop Southern Hills Pipeline out of the Midcontinent and Sand Hills pipeline out of the Permian, and move those barrels to Mont Belvieu.”

Bradsby pointed to demand from petrochemical companies for ethane, which is used as a feedstock. It is cheaper than another feedstock, naphtha, and could compete on a global scale when moved to the Gulf Coast for export.

“Five years ago, if we would have asked the petrochemical companies board, ‘Where is the next dollar going?’ they would not have had the U.S. on the list,” Bradsby said. “Today, there are four world-scale crackers being built in the Gulf Coast. A world-scale cracker will consume 90,000 barrels a day of ethane each. So by 2017, the expectation is that these four facilities will be online and create another 360,000 barrels a day of ethane demand.”

Propane could also benefit from being taken to the Gulf Coast for export, Bradsby added.

Midstream ramp-up in the Midcon

DCP has pumped about $2 billion into the Southern Hills and Sand Hills Pipeline projects. The 800-mile Southern Hills pipeline, which carries NGLs from the Midcontinent to Mont Belvieu, has a capacity of 175,000 barrels per day. The Sand Hills Pipeline, which originates in the Permian and has an initial capacity of 200,000 barrels per day, also carries NGLs to the Gulf Coast.

“The NGL production we expect to see is at least 100,000 bpd of growth over the next several years,” Bradsby said.

DCP has also rapidly developed operations in the Cana Woodford over the past 18 months.

“We’ve gone from moving zero in that area to moving 160 to 170 MMcf a day,” Bradsby said. “We’ve installed access to obtain a couple of hundred million a day capacity, so from a processing perspective, we did upsize our NGL lateral into that area, anticipating additional growth.”

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