Targa Resources Boosts Capex with Pipeline, Gas Processing Expansions

Researched by Industrial Info Resources (Sugar Land, Texas)--Targa Resources Corporation (NYSE:TRGP) (Houston, Texas) has once again boosted its planned capital expenditures for 2018. Among the projects added to the company's to-do list is the expansion of its Grand Prix natural gas liquids (NGL) pipeline into Oklahoma and the construction of two gas processing plants in the Delaware Basin.

Targa had previously announced capex of $1.6 billion in 2018 for growth-related projects but has now bumped this up to $2.2 billion. For more information, see February 21, 2018, article - Targa Resources Ups 2018 Capex to $1.6 Billion as Demand Grows on Gulf Coast.

Targa's Grand Prix Pipeline was originally planned to run from the Permian Basin to the company's fractionation and storage facility in Mont Belvieu, Texas. The pipeline will carry approximately 300,000 barrels per day (BBL/d) of Y-grade NGL, which is expandable depending on how much upstream production increases. For more information, see Industrial Info's project report. The pipeline will now extend into southern Oklahoma, where Targa has existing and planned processing plants in the Arkoma area in its SouthOK system, and also long-term commitments for transportation and fractionation from third parties, including Valiant Midstream LLC (Oklahoma City, Oklahoma). The pipeline is expected to be in service in the second quarter of next year. Construction of the Grand Prix is estimated to cost about $1.65 billion, with $900 million planned to be spent this year.

In Mont Belvieu, Targa plans to kick off construction of a sixth NGL fractionation train quite soon to keep up with increasing volumes. The train will produce 100,000 BBL/d of high-purity butane, propane, ethane and other liquids. Optimized Process Designs LLC (Katy, Texas) is performing engineering, procurement and construction on the project, which is planned to be completed in the first quarter of next year. For more information, see Industrial Info's project report.

Also announced were two additional gas processing plants in the Delaware Basin, known as the "Falcon" and "Peregrine" plants. Along with the plants comes 220 miles of 12- to 24-inch gas processing pipeline across parts of the Delaware Basin. The Falcon and Peregrine plants each will have a processing capacity of 250 million cubic feet per day and will begin operations in the fourth of 2019 and the second quarter of 2020, respectively. Targa estimates total capex related to the plants and gathering pipeline will be $500 million, with $200 million expected to be spent in 2018.

Also underway is construction of the company's natural gas processing plants in Midland and Midkiff, Texas. Both plants will have a processing capacity of 200 million cubic feet per day of natural gas when completed this year. KP Engineering Limited Partnership (Tyler, Texas) is performing EPC on the projects. For more information, see Industrial Info's project reports on the Johnson plant in Midland and the Joyce plant in Midkiff.

To accommodate growing volumes from the Permian, Targa is already planning expansion projects at the Johnson and Joyce plants. The expansion at the Johnson plant will increase capacity by 250 million cubic feet per day of gas produced by Pioneer Natural Resources (NYSE:PXD) (Irving, Texas), bringing total capacity to 450 million cubic feet per day. Construction is planned to kick off next year and be completed in the first quarter of 2020. For more information, see Industrial Info's project report. The expansion at the Joyce plant also will add 250 million cubic feet per day of processing capacity for gas produced by Pioneer. Construction is expected to be completed in the fourth quarter of next year. For more information, see Industrial Info's project report.

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