Targa Resources Awards EPC Contract for Permian Cryogenic Gas Processing Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Targa Resources Corporation (NYSE:TRGP) (Houston, Texas) recently awarded the engineering, procurement and construction (EPC) contract for construction of a cryogenic natural gas processing plant to KP Engineering Limited Partnership (Tyler, Texas). Industrial Info is tracking more than $2.5 billion in active Targa Resources projects.

The cryogenic natural gas processing plant will be near Midkiff, Texas, in the Permian Basin, and will have a processing capacity of 200 million standard cubic feet per day (MMSCFD) of natural gas. The project has an estimated total investment value of $200 million. Construction is planned to be wrapped up early next year. For more information, see Industrial Info's project report.

In the company's second-quarter conference call earlier this month, Chief Executive Officer Joe Bob Perkins spoke about the company's expansion of gas processing in the Permian. "We continued progress on adding 710 million cubic feet per day of processing capacity in the Permian Basin, which will bring us to a total of approximately 2.5 billion cubic feet per day of gross processing capacity across the basin by next year," he said. The company also is planning the Wildcat cryogenic natural gas processing plant near Wink, Texas, in the Permian. The plant will have a design capacity of 250 MMSCFD. Construction on the $130 million plant is set to begin soon and should be finished next summer. Select Engineering (Tulsa, Oklahoma) is performing the engineering, procurement and construction. For more information, see Industrial Info's project report.

Some of Targa's biggest projects are occurring near the natural gas liquids (NGL) crossroads of Mont Belvieu, Texas. The company is planning to construct a sixth NGL fractionator at its site there to produce 100,000 barrels per day (BBL/d) of high-purity butane, propane, ethane and other liquids, sourcing the feedstock from the Marcellus Shale. The project, which has an estimated total investment value of $475 million, is expected to kick off construction in the first half of next year and be completed by the end of 2018. For more information, see Industrial Info's project report.

Targa's largest project is the proposed 600-mile Grand Prix NGL pipeline, which would run from the Permian Basin and Targa's North Basin Gathering System near Dallas, Texas, to Mont Belvieu. The pipeline would transport 300,000 BBL/d of Y-grade NGL to the company's storage and fractionation facilities in Mont Belvieu. Construction is planned to begin in the second quarter of next year and take about a year to complete. The project has an estimated total investment value of $1.3 billion. UniversalPegasus International Incorporated is performing engineering on the project. For more information, see Industrial Info's project report.

"Grand Prix will connect our strong and growing franchise Permian Basin footprint to our downstream assets at Mont Belvieu. Our processing footprint translates into Targa moving significant daily volumes of NGLs out of the Permian with good visibility on substantial growth in the future," said Perkins. "Grand Prix is expected to be operational in the second quarter of 2019, and we will begin to move significant NGL volumes to Grand Prix on day one. NGL volumes from additional Targa processing plants in progress or those needed in the future will flow to Grand Prix, which will provide significant margin expansion and fee-based growth looking forward. ... Including the spending associated with Grand Prix, approximately 80% of Targa's current capital spending is related to the Permian, highlighting that Targa's attractive investment opportunities are being primarily driven by volumes from arguably the most prolific basin in the world."

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