For the past six years, Hart Energy has been compiling and publishing its rankings of the top natural gas liquids (NGL) producers to accompany its annual rankings of the top gas processors. During this time only one company has been the top NGL producer: DCP Midstream. This year, the company became the first to hold both the top producer and top processor positions in a single year. In many ways this achievement was the result of the company’s long-term strategy of becoming an integrated midstream entity, which is highlighted by its super-system approach that ties together its assets in some of the most important plays in the country.

This integrated approach is also embraced by the company’s chief executive, Wouter van Kempen, who in three years with the organization, has headed up its Midcontinent division, gathering and processing unit and has overseen its NGL and gas marketing and logistics operations as president and chief operating officer prior to accepting his current role as executive of DCP Midstream and chief executive of DCP Midstream Partners.

MIDSTREAM How did you get your start in the energy industry?

VAN KEMPEN I started working for General Electric (GE) about 20 years ago, working in its plastics and chemicals business, and from there, I worked for a number of GE businesses including Lighting, Power Systems and Industrial Systems. In those businesses I was able to see many parts of the energy industry. Not always on the oil and gas side, but also on the component-manufacturing and end-user side. Because GE had a large chemical business, it was in many ways an end-user of many of the products that come out of the midstream industry.

After that I went to Duke Energy, where I worked on another side of the industry in the deregulated power markets. I saw a number of different facets of the energy industry before I began working at DCP Midstream three years ago.

MIDSTREAM How has your experience working as an enduser helped you in your current post at DCP Midstream?

VAN KEMPEN Understanding what people go through and how it is sitting on the other side of the table is always helpful. The most important piece in every business and in every industry that you work in is to understand the key drivers: the industry’s cycles and its supply and demand dynamic. In many ways, I would say sitting on the other side of the table as an end-user was probably easier at the time than where I now sit on the midstream side.

A large part of that relates to the cycles of the business as the past six to 12 months have been much better for end-users due to NGL prices falling at a pretty significant rate. Obviously, this has been a major advantage for the chemical industry in the U.S.

MIDSTREAM What led you to joining DCP Midstream?

VAN KEMPEN I’ve known our former chairman and chief executive, Tom O’Connor, for a long time and worked with him at Duke Energy. I’ve always seen Tom as a great friend, a great mentor and a great leader. That was the start of an indirect link leading me here.

At the same time, you can’t just go from a good career to blindly following someone else to another company. What really attracted me to DCP Midstream was seeing how shale gas and oil were changing the energy structure and economic outlook for the U.S.

Five years ago, we were always talking about natural gas as a bridge fuel. I still laugh at that because it’s going to be a heck of a bridge. I don’t think anyone can see the other side because I don’t think it’s a bridge fuel. Natural gas is going to be with us for generations to come.

Also, 10 years ago, we were talking about how to close down processing plants, and the midstream industry was getting smaller. Now the industry is going through this tremendous growth cycle, and I strongly believe that we are only in the first innings. So to be a part of this industry, to be a part of this growth cycle and to work for a company like DCP Midstream that has a great reputation and legacy, was a very exciting opportunity for me.

DCP Midstream is the smallest company that I’ve worked for, but it’s still a $15-billion entity with tremendous opportunities. We have more of an entrepreneurial feel than in some of the super-large companies where I used to work.

If someone has an idea, the lines are a lot shorter to get to the top management. Employees can present ideas to me, my door is always open, and I believe I am very accessible. It’s another opportunity to effect change and drive us to greater performance in safety, in operations and for our customers. Overall, I think that is a very interesting opportunity, and I am very happy to work with our 3,200 employees.

MIDSTREAM Looking at your experience at various divisions at DCP Midstream, has there been a particular post, outside of your current one, that stood out for its challenges and rewards?

VAN KEMPEN It’s interesting because during the past three years I have had the opportunity to work with all the various divisions within DCP. This might be a politically correct answer, but it’s actually the truth—all of them have a whole bunch of different challenges and opportunities.

In the Midcontinent, where I started with DCP, we have a huge asset position, but it’s an area that has become very competitive with a lot less drilling in the core part of the region. In the Permian, there’s great opportunity, but we’re dealing with a different set of issues related to aging infrastructure and the need to build capacity. And, in our north and south regions, we continue to go through enormous growth cycles. Each of the regions we work in has different needs and requirements.

On the other side of the equation is our marketing and logistics division, which our team built from scratch. We are now the third-largest operator of NGL pipelines in the country.

Each of these divisions provided very good building blocks for me and was tremendously helpful in preparing me for my current role.

MIDSTREAM You hold dual citizenship in both the U.S. and the Netherlands. What differences are there in the energy outlook and utilization of midstream infrastructure between these two countries?

VAN KEMPEN I’ve not lived in the Netherlands for quite some time, but that country also has significant gas reserves. But given the dense population in the Netherlands, it makes production more difficult than in the U.S.

MIDSTREAM What has been the biggest change that you’ve seen in the midstream since you started working in the sector?

VAN KEMPEN It has to be the growth of the shale plays. As I said earlier, 10 years ago we were thinking about mothballing plants and now none of us are thinking about making the pie smaller. We’re all thinking about how we can grow, and how we can keep up with production companies so we can gather, process, transport and fractionate their gas and liquids.

MIDSTREAM What are the biggest challenges that the midstream is facing?

VAN KEMPEN On a macro basis, it’s all around regulatory issues like permitting, emissions and hydraulic fracturing. At a micro level, it is around issues like finding skilled labor. It’s interesting because our unemployment rate is 7.3%, but everybody in the oil and gas industry is looking at ways to attract skilled workers to the Permian basin, the Eagle Ford, the DJ basin and other regions in which the industry operates because there’s not a lot of unemployment in these regions.

I worry about where to find the engineering talent. And everybody in our industry is questioning how they will replace an aging workforce over the next few years with younger workers.

At DCP Midstream, we have implemented several programs such as the national career and technical scholarship. We provide scholarships to students in two-year degree programs in gas-related fields with the hope of recruiting them when they graduate. We also have an initiative-side program called Operation Next that reaches out to military veterans and supports counseling and job training efforts. We can utilize the great training these veterans received in the military, especially related to the mechanical field. It is great that we can provide these veterans who have given so much to our country with great jobs in the oil and gas industry.

MIDSTREAM Can you talk about DCP Midstream’s super-system strategy?

VAN KEMPEN DCP Midstream and our predecessor companies have been around for more than 80 years, but in our current form the company was created through multiple mergers in the late ‘90s and early 2000s. After looking at our infrastructure, our teams realized we had a lot of assets throughout the country and decided that instead of running them as individual assets, there were great benefits if we would tie the various systems together. This provided us with more operational flexibility, which gives the customer better reliability and more capacity.

We strongly believe our super-system strategy is a competitive advantage for us, since if one processing plant goes down, we are able to reroute the gas to another plant. This helps keep our customers happy and helps them make money, which is what we are here for.

The way we take this strategy forward is that whenever we build new plants, we always try to think of how to connect them to the rest of the system in the area. We’ve explored this strategy throughout our company. In the Eagle Ford, we have a 1.2 billion cubic feet per-day super system that has been tied together over the past few years.

We also have super systems in the Permian basin, West Texas, New Mexico, Oklahoma and the DJ basin.

We’d rather have several plants in a region that are tied together and that span a broader geographical area than to rely on a single larger plant in one area. I think our approach is better for our customers versus putting all of their eggs in one basket.

MIDSTREAM How is this approach cost-prohibitive for other companies to duplicate?

VAN KEMPEN First, they need a huge footprint. We’re the largest processor in the country, and that gives us the advantage of a huge footprint. It also costs a bit more money upfront to create this type of system and plumb the assets together. Some of the newer companies entering the midstream are looking for faster money by flipping their assets. They don’t always build for the long term.

We look for our customer relationships to last a long time. We’re not doing business with people for just a one, two- or three-year deal. We build and operate long-lived assets that are going to be around for 30 to 50 years. I always tell customers that DCP is the company that builds these assets, and we’ll be the ones that will dismantle them and replace them in a generation or two.

MIDSTREAM DCP Midstream has a very successful master limited partnership (MLP), DCP Midstream Partners. What has been your approach to creating this entity?

VAN KEMPEN Our strategy has been to grow DCP Midstream into a large, fully integrated midstream service provider. Five years ago, DCP Midstream Partners was an $800-million company. Today, it is a $6-billion company. DCP Midstream Partners is not only the funding vehicle for our overall enterprise; we also use the MLP as a vehicle to do organic growth and acquisitions.

The MLP structure is well proven and has been very beneficial in helping not just the industry, but also in growing the overall economy by creating jobs and investments.