DCP Midstream has entered into an agreement with Penn Virginia Resource Partners (PVR) to acquire the Crossroads processing plant and associated gathering system, for approximately $63 million.
The Crossroads system, located in Harrison county in East Texas, includes 8 miles of gas gathering pipe, an 80 million cubic feet per day cryogenic processing plant, about 20 miles of NGL pipeline and a 50% ownership in an approximately 11-mile residue gas pipeline.
This system will allow the DCP to increase critical midstream services to producers that are expanding their liquids rich Haynesville shale and Cotton Valley drilling programs in east Texas, the company said.
"This immediately accretive acquisition provides us with an opportunity to increase our market position in East Texas and demonstrates our commitment to provide integrated midstream services to our customers," said Mark Borer, CEO of DCP.
The addition of the Crossroads system is a synergistic bolt-on acquisition to our existing East Texas system and will expand our processing capabilities to support our customers growth."
DCP said it intends to use borrowings under its bank credit facility to finance the expected closing of the acquisition on or about July 2, 2012.