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DCP Midstream Partners to acquire DCP Midstream, LLC

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World Pipelines,

DCP Midstream Partners (DPM) has announced that it has acquired the assets and debt of DCP Midstream, LLC (a 50/50 joint venture between Phillips 66 and Spectra Energy). The transaction will combine the DPM and DCP Midstream, LLC, in turn simplifying the corporate structure and creating the largest natural gas liquids (NGL) producer and gas processor in the US. It will also reduce operating costs.

According to Reuters: “[On 23 January] the combined company, which has an enterprise value of US$11 billion, will be renamed DCP Midstream LP and will trade with the ticker symbol "DCP" on the New York Stock Exchange.”

The transaction increases Phillips 66 and Spectra Energy's ownership in DPM to 38%. The companies will have greater participation in increased earnings from future growth opportunities.

As highlighted by Nasdaq, DPM is currently in the process of constructing additional field compression and plant bypass infrastructure. The new plants will connect to the Front Range pipeline for NGL takeaway to Mont Belvieu (Texas).

Moreover, DPM will increase the NGL takeaway capacity of Sand Hills pipeline by 30%, to 365 000 bpd.

DCP Midstream LLC's debt of US$3.15 billion will be taken on by DPM.

“This transformational transaction provides a platform of premier assets with strong growth opportunities in the key US producing basins at a multiple that paves the way towards future distribution growth. The transaction benefits both our unitholders and our owners with a simplified structure," said Wouter van Kempen, Chairman, President and CEO of both DCP Midstream and DCP Midstream Partners, in a statement.

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