Targa Resources Sees Bulk of Growth Projects Nearing Finish Line

Researched by Industrial Info Resources (Sugar Land, Texas)--Targa Resources Corporation (NYSE:TRGP) (Houston, Texas) expects to complete the bulk of its major pipeline, gas processing and fractionation growth projects now underway within the next 6 to 12 months, allowing it to focus more on incremental growth, executives with the company said on Thursday. Industrial Info is tracking more than $2.7 billion in project activity by Targa.

Targa's growth capital budget for this year remains at $2.2 billion, executives said during the company's second-quarter earnings conference call. Chief Executive Officer Joe Bob Perkins said Targa began the year with a focus on its growth capital projects, many of which will be completed in the first half of 2019.

Targa's largest project, the Grand Prix pipeline, remains on schedule and on budget, and is expected to be fully operational in the second quarter of 2019, Perkins said. With a total investment value (TIV) of $1.3 billion, the Y-grade natural gas liquids (NGL) 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 Grand Prix's West Leg, South Leg and Gerty, Oklahoma, extension. For related information, see April 3, 2018, article - Targa Resources Boosts Capex with Pipeline, Gas Processing Expansions.

Another one of Targa's big-ticket items is the $350 million NGL Fractionator Train #6 addition in Mont Belvieu, which is on track to come online in the first quarter of 2019. The train will produce 100,000 BBL/d of high-purity butane, propane, ethane and other liquids. For more information, see Industrial Info's project report.

"The tightness in fractionation capacity at Mont Belvieu and the outlook for NGL volume to Mont Belvieu is accelerating customer demand [at] our fractionation facilities at Mont Belvieu [which] operated at near full [capacity] during the second quarter," said Targa President Matt Meloy during the earnings conference call. "Fractionation capacity at Mont Belvieu is expected to remain very tight through 2019, even with our Train 6 [fractionation] train coming online."

Meloy gave a progress report on some of Targa's other major projects. He said the 200-million-cubic-foot-per-day Johnson natural gas processing plant in Midland, Texas, is expected to be online by the end of September. For more information, see Industrial Info's project report.

Also, the 200 million-cubic-foot-per-day Phase IV cryogenic natural gas processing expansion at the company's Little Missouri facility in North Dakota is on track for completion by the end of 2018, Meloy said. For more information, see Industrial Info's project report.

The Gulf Coast Express natural gas pipeline, a joint venture of Targa, DCP Midstream LP (NYSE:DCP) (Denver, Colorado) and Kinder Morgan Incorporated (NYSE:KMI) (Houston), is expected to be operational in the fourth quarter of 2019. With a TIV of $1.7 billion, the 1.98 billion-cubic-foot-per-day pipeline will run from the Permian Basin to the Agua Dulce, Texas area. For related information, see December 22, 2017, article - Final Investment Decision Made on Gulf Coast Express Natural Gas Pipeline.

For the just-ended quarter, Targa reported $109.1 million in net income attributable to the company, up from $57.6 million in second-quarter 2017.

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