Analyzing Targa Resources’ Growth Projects
Targa Resources (TRGP) plans to drive growth by investing in new projects and limiting the impact of changes in commodity prices. Targa Resources completed two major projects in 2016—the CBF Train 5 Expansion and West Texas Buffalo Plant.
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The company approved a new 200 million cubic feet per day plant in West Texas in November 2016. The plant is expected to be completed in 4Q17. The above table lists Targa Resources’ key capital projects and their expected completion dates.
Targa Resources expects the 200 million cubic feet per day Raptor plant in South Texas to be in service in 1Q17. It’s constructing the plant in a joint venture with Sanchez Energy (SN).
Permian Basin expansion
On January 23, 2017, Targa Resources announced an agreement to acquire interests in Outrigger Delaware and Midland assets for an initial cash consideration of $565 million. The acquisitions expand Targa Resources’ reach into the Delaware Basin and Midland Basin. The transaction is expected to close in 1Q17.
In the news release announcing the acquisition, Joe Bob Perkins, Targa Resources’ CEO, said, “The acquisition of the Outrigger Permian assets complements our existing gas gathering and processing footprint very nicely, while expanding our reach deeper into both the Delaware and Midland Basins. The producer acreage that we will serve through this acquisition has decades of drilling inventory in prolific areas, with multiple stacked pay zones.”
In the next part, we’ll look at the gains in Targa Resources stock in the past year.