DENVER—DCP Midstream LP announced July 30 that it has signed a long-term agreement with Western Midstream Partners LP that will provide DCP with up to 225 million cubic feet per day of incremental processing capacity at Western’s Denver-Julesberg Basin gas processing complex, which includes the Latham II plant that is presently under construction.

The facility will be well-integrated, with NGL takeaway via DCP’s D-J Southern Hills extension, as well as the Front Range pipeline, and residue gas takeaway via the Cheyenne Connector. This project will increase DCP’s total natural gas processing and bypass capacity in the D-J Basin to approximately 1.5 billion cubic feet per day.

“This is a very capital efficient opportunity that allows us to meet the commitments we have made to our customers to significantly expand our capacity in the D-J Basin by mid-2020,” said Wouter van Kempen, president, chairman and CEO of DCP Midstream. “As we continue to strengthen our position as the premier, fully-integrated midstream service provider in the D-J Basin, this highly accretive project allows us to capitalize on full value chain economics and drive increased future cash flows. Additionally, with permits and land secured, we preserve the optionality to build future capacity via the Bighorn facility.”