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Released May 09, 2019 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Targa Natural Resources Corporation (NYSE:TRGP) (Houston, Texas) has planned $2.3 billion in net growth capital projects this year, but will exercise much more restraint going forward when it comes to new investments, executives with the midstream energy company emphasized this week.
Industrial Info is tracking more than $5.1 billion in Targa Resources projects that are in various stages of development.
Click on the image at right for a graph showing Targa project activity by industry sector.
With the majority of announced projects on track to begin operations in 2019, Targa estimates 2020 net growth capital expenditures will be "significantly lower," according to the company's first-quarter 2019 earnings presentation. The company didn't provide an estimate for 2020.
During Targa's earnings conference call with industry analysts on Tuesday, company executives said they will raise the bar for new projects.
Chief Executive Officer Joe Bob Perkins said, "We have continued to increase scrutiny with heightened discipline and prioritization on all future new capital projects, so we can continue to right-size our capital spend versus cash flow going forward."
He added: "We will continue to pursue opportunities to align capital spend with the activity levels of our customers and rigorously prioritize our capex backlog with a heightened focus around our core integrated strategy."
Company executives gave an update on several projects.
In April, the 250 million-cubic-foot-per-day Hopson cryogenic natural gas-processing plant near Midkiff in West Texas began operations. ISTI Plant Services Incorporated (Tulsa, Oklahoma) was the engineering, procurement and construction (EPC) provider for the $150 million project, which processes gas from the Permian-Delaware area. For more information, see Industrial Info's project report.
Targa's 250 million-cubic-foot-per-day Pembrook natural gas-processing plant, also near Midkiff, is expected to begin operations in third-quarter 2019, the company said. For more on the $150 million plant, see Industrial Info's project report.
The company's Falcon natural gas-processing plant near Pecos, Texas, remains on track to be completed in the fourth quarter of 2019, and the Peregrine natural gas-processing plant near Carlsbad, Texas, is expected to be completed in the second quarter of 2020. Both plants have a $150 million price tag and will have a capacity of 250 million cubic feet per day. See Industrial Info's project reports on the Falcon and Peregrine plants.
Targa's Grand Prix Y-grade natural gas liquids (NGL) pipeline is on track to be fully operational in the third quarter of this year, said Targa President Matthew Meloy. The pipeline segment originating from the Permian is complete and is already transporting NGL, he added. The $1.3 billion pipeline was originally intended to run from the Permian Basin to Targa's fractionation and storage operations in Mont Belvieu, Texas. It has since been extended into southern Oklahoma. The project has a carrying capacity of 300,000 barrels per day (BBL/d), expandable to 550,000 BBL/d. For more information, see Industrial Info's project reports on the pipeline's West Leg, South Leg and Oklahoma extension.
In Mont Belvieu, Targa's $350 million Train 6 fractionator addition is expected to be fully operational this month. The fractionator will produce 100,000 barrels per day of high-purity butane, propane, ethane and other liquids. For more information, see Industrial Info's project report.
Construction continues on trains 7 and 8 in Mont Belvieu, each with a 110,000-barrel-per-day capacity, Meloy said. Train 7 is expected to be online in the first quarter of 2020, while Train 8 would be online in third-quarter 2020.
"We decided to slightly push the timing of Train 8 into the third quarter of 2020 to optimize our construction schedule and realize some modest cost savings," Meloy said. See Industrial Info's project reports on Train 7 and Train 8.
In North Dakota, construction continues on the company's $150 million Little Missouri Natural Gas Processing Plant Train 4 addition. However, this year's harsh winter resulted in a few weeks of lost construction time, and the planned startup of the facility has slipped into the early part of third-quarter 2019, Meloy said. For more information, see Industrial Info's project report.
Targa reported a $38.9 million loss for the just-ended quarter, compared with a $22.9 million profit in first-quarter 2018. The company cited lower natural gas, NGL and condensate prices, along with higher operating expenses in the Permian Basin, due in part to higher labor costs. Targa executives said they expect earnings before interest, taxes, depreciation and amortization (EBITDA) to improve later this year as key projects come online and contribute revenue.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Industrial Info is tracking more than $5.1 billion in Targa Resources projects that are in various stages of development.
With the majority of announced projects on track to begin operations in 2019, Targa estimates 2020 net growth capital expenditures will be "significantly lower," according to the company's first-quarter 2019 earnings presentation. The company didn't provide an estimate for 2020.
During Targa's earnings conference call with industry analysts on Tuesday, company executives said they will raise the bar for new projects.
Chief Executive Officer Joe Bob Perkins said, "We have continued to increase scrutiny with heightened discipline and prioritization on all future new capital projects, so we can continue to right-size our capital spend versus cash flow going forward."
He added: "We will continue to pursue opportunities to align capital spend with the activity levels of our customers and rigorously prioritize our capex backlog with a heightened focus around our core integrated strategy."
Company executives gave an update on several projects.
In April, the 250 million-cubic-foot-per-day Hopson cryogenic natural gas-processing plant near Midkiff in West Texas began operations. ISTI Plant Services Incorporated (Tulsa, Oklahoma) was the engineering, procurement and construction (EPC) provider for the $150 million project, which processes gas from the Permian-Delaware area. For more information, see Industrial Info's project report.
Targa's 250 million-cubic-foot-per-day Pembrook natural gas-processing plant, also near Midkiff, is expected to begin operations in third-quarter 2019, the company said. For more on the $150 million plant, see Industrial Info's project report.
The company's Falcon natural gas-processing plant near Pecos, Texas, remains on track to be completed in the fourth quarter of 2019, and the Peregrine natural gas-processing plant near Carlsbad, Texas, is expected to be completed in the second quarter of 2020. Both plants have a $150 million price tag and will have a capacity of 250 million cubic feet per day. See Industrial Info's project reports on the Falcon and Peregrine plants.
Targa's Grand Prix Y-grade natural gas liquids (NGL) pipeline is on track to be fully operational in the third quarter of this year, said Targa President Matthew Meloy. The pipeline segment originating from the Permian is complete and is already transporting NGL, he added. The $1.3 billion pipeline was originally intended to run from the Permian Basin to Targa's fractionation and storage operations in Mont Belvieu, Texas. It has since been extended into southern Oklahoma. The project has a carrying capacity of 300,000 barrels per day (BBL/d), expandable to 550,000 BBL/d. For more information, see Industrial Info's project reports on the pipeline's West Leg, South Leg and Oklahoma extension.
In Mont Belvieu, Targa's $350 million Train 6 fractionator addition is expected to be fully operational this month. The fractionator will produce 100,000 barrels per day of high-purity butane, propane, ethane and other liquids. For more information, see Industrial Info's project report.
Construction continues on trains 7 and 8 in Mont Belvieu, each with a 110,000-barrel-per-day capacity, Meloy said. Train 7 is expected to be online in the first quarter of 2020, while Train 8 would be online in third-quarter 2020.
"We decided to slightly push the timing of Train 8 into the third quarter of 2020 to optimize our construction schedule and realize some modest cost savings," Meloy said. See Industrial Info's project reports on Train 7 and Train 8.
In North Dakota, construction continues on the company's $150 million Little Missouri Natural Gas Processing Plant Train 4 addition. However, this year's harsh winter resulted in a few weeks of lost construction time, and the planned startup of the facility has slipped into the early part of third-quarter 2019, Meloy said. For more information, see Industrial Info's project report.
Targa reported a $38.9 million loss for the just-ended quarter, compared with a $22.9 million profit in first-quarter 2018. The company cited lower natural gas, NGL and condensate prices, along with higher operating expenses in the Permian Basin, due in part to higher labor costs. Targa executives said they expect earnings before interest, taxes, depreciation and amortization (EBITDA) to improve later this year as key projects come online and contribute revenue.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
