Niobrara Update – Three Heavyweight Companies to Develop New NGL Pipeline to Serve Colorado’s Denver-Julesburg Basin
Enterprise Products Partners L.P., Anadarko Petroleum Corporation and DCP Midstream, LLC today announced an agreement to design and construct a new natural gas liquids (“NGL”) pipeline that will originate in the Denver-Julesburg Basin (“DJ Basin”) in Weld County, Colorado and extend approximately 435 miles to Skellytown, Texas in Carson County.
Each party will hold a one-third interest. The new Front Range Pipeline (“Front Range”), with connections to the Mid-America Pipeline system and the recently announced Texas Express Pipeline, will help producers in the DJ Basin maximize the value of their NGL production by providing reliable takeaway capacity and market access to the Gulf Coast, the largest NGL market in the United States.
Depending on shipper interest to an upcoming binding open commitment period, initial capacity on Front Range is expected to be approximately 150,000 barrels per day (“BPD”), which can be readily expanded to approximately 230,000 BPD. Enterprise will construct and operate the pipeline, which is expected to begin service in the fourth quarter of 2013.
“We are very pleased to partner with Anadarko and DCP on this project, which will extend Enterprise’s integrated pipeline network into the liquids-rich DJ Basin to address the area’s NGL transportation constraints, providing flow assurance and market choice for producers,” said Michael A. Creel, Enterprise president and chief executive officer. “The Front Range project is anchored by NGL volumes produced from facilities operated by affiliates of Anadarko and DCP Midstream.”
“With the success and significant growth expected in Anadarko’s liquids-rich Wattenberg HZ (horizontal) program, Front Range will provide needed access to premium markets, which enables us to capture the highest wellhead netbacks. When combined with the recent announcement by Western Gas Partners, LP to construct the Lancaster Plant in the DJ Basin, Front Range provides significant value to Anadarko and its stakeholders,” said Danny Rea, Vice-President of Midstream for Anadarko. “We are pleased to have the opportunity to partner with two quality companies like DCP and Enterprise in the Front Range project.”
Bill Waldheim, president of DCP Midstream’s NGLs, Gas and Crude Oil Logistics business unit, said, “The DJ Basin for several years has been an attractive liquids-rich resource. Now, with the introduction of horizontal drilling and this new phase of oil-driven development, the volumes and the infrastructure needs are accelerating. In anticipation of growing volumes, DCP remains focused on the liquids transportation needs of the basin. Given the plant development under way in the DJ, DCP has a strategic need to provide open access transportation services to the higher-valued Mt. Belvieu market.”