Targa Targets $175 Million Capex Boost for 2017

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Targa Resources Corporation (NYSE:TRGP) (Houston, Texas) expects to spend at least $700 million on growth capital projects this year, up from $525 million in 2016, executives with the midstream operator said Wednesday. Industrial Info is tracking more than $1 billion in active Targa Resources projects.

Chief Executive Officer Joe Bob Perkins and other Targa officials outlined the capital expenditure plans during the company's fourth-quarter 2016 earnings presentation. He said a portion of the capital expenditures that were planned for 2016 was moved into this year.

Four major projects make up $240 million of the planned capital expenditures, $400 million is earmarked for gathering and processing activities, and the remaining amount will be spent on smaller projects associated with the company's Mt. Belvieu, Texas, operations, Perkins said.

Targa's $200 million grassroot Raptor cryogenic natural gas liquids (NGL) recovery gas processing plant in La Salle County, Texas, is expected to be fully operational by April, company officials said. It will process 200 million standard cubic feet per day of natural gas from the Eagle Ford shale. For more information, see Industrial Info's project report.

A planned expansion of the Raptor plant, valued at $60 million, would increase capacity by 60 million standard cubic feet per day. For more information on the expansion, see Industrial Info's project report.

In Channelview, Texas, construction is under way on Targa's 35,000-barrel-per-day condensate splitter, which is valued at $115 million. It will produce naphtha, kerosene, jet fuel and liquefied petroleum gas (LPG). Company officials said Wednesday the splitter is expected to be online by the first quarter of 2018. For more information, see Industrial Info's project report.

Targa reported a $150.8 million net loss for fourth-quarter 2016, compared with net earnings of $27 million for fourth-quarter 2015. For the full year of 2016, the company reported a net loss of $187.3 million, compared with net income of $58.3 million for 2015. Still, "2016 was a successful year for Targa as we were able to improve our balance sheet and asset position in a volatile period for our industry," Perkins said in a press release. He noted the recent planned acquisition of additional midstream assets in the Delaware and Midland basins, for an initial cash consideration of $565 million. The acquisition would increase Targa's gross processing capacity to about 2 billion cubic feet per day across the Permian Basin by the end of 2017.

LPG Exports
Targa says its Galena Park facility in Texas is the second, and most flexible, LPG export terminal on the Houston Ship Channel. D. Scott Pryor, executive vice president -- logistics and marketing, said during the earnings presentation that two thirds of Targa's 7 million-barrel-per-month LPG export capacity is contracted through 2022. Exports averaged 5.5 million barrels per month in 2016, exceeding the company's guidance for the year, he added. About 64% of the LPG exports went to the Americas, and there was an increase in demand from places like Indonesia and Europe. Targa is benefiting from the recent production cuts by OPEC, which has tightened the LPG waterborne market, Pryor continued.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 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/.