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DCP Midstream processes natural gas and sells the valuable liquids it removes, a business whose income rises and falls with energy prices.
DCP Midstream is a natural gas processing company. It takes the raw gas that comes out of the ground, strips out the valuable liquids that ride along with it — propane, butane, ethane and other “natural gas liquids” that sell for much more than plain gas — and sends the leftover “dry” gas into long-distance pipelines. It also owns pieces of those pipelines, plus storage and gathering lines that move gas from wells to its plants.
The core service is essentially rent plus resale. Customers, mostly oil and gas producers and pipeline operators, pay DCP to gather and process their gas, and DCP keeps a slice of the liquids it recovers as part of its fee. So the money comes from two places: steady fee income for running the equipment, and the price it gets for the liquids it sells. That second piece is why the business is so closely tied to energy prices — when propane and ethane prices are high, DCP does very well, and when they crash, the profits shrink fast. The company is a partnership, not a regular corporation, and it was controlled by Phillips 66 Phillips 66 before a takeover. Phillips 66 bought the shares of DCP Midstream it did not already own in a roughly $3.8 billion deal, completed in mid-2023, folding the business into its midstream segment. Before that, DCP was a major independent player, with much of its infrastructure clustered in the Permian Basin, across Texas and New Mexico, plus parts of the Midwest and Gulf Coast. It also grew partly by acquisitions, including the purchase of the gathering and processing assets of Enable Midstream's parent companies in a 2021 deal valued at around $3 billion.
Because DCP paid out most of its cash to unitholders as distributions rather than holding it back, the partnership was always a love-it-or-hate-it stock: a fat yield when times were good, a painful cut when they weren't. It slashed its distribution during the 2020 oil crash, for example. Note that the company is no longer a separate, publicly traded entity — it now sits inside Phillips 66 — so anyone looking up its old ticker is looking at history, not a live investment.
Saved answer · last researched 6 Nov 2026