Targa Expands Permian Gas Processing, Delaware Express Pipeline Capacity
Targa Resources plans to expand its Delaware Express NGL Pipeline and build two new Permian gas processing plants as transport volumes continue rising.
(Reuters) — Pipeline operator Targa Resources forecast current-year adjusted core profit above analysts' expectations on May 7, helped by higher transport volumes of natural gas liquids through its system.
U.S. natural gas futures averaged $9.54 per million British Thermal Units in the January-March quarter, up 9.5% from last year. Natural gas was supported by a surge in spot prices during Winter Storm Fern early in the quarter.
American pipeline companies are benefiting from robust oil and gas output in the Permian Basin, with ongoing uncertainty about ship traffic through the Strait of Hormuz leading to a greater preference for U.S.-sourced LNG.
Targa said it expects to start operations on its Delaware Express NGL Pipeline expansion in May 2026.
The company also announced plans to build two new natural gas processing plants — the 265 million cubic feet per day Roadrunner III and the 275 million cubic feet per day Copperhead II — in the Permian Delaware basin, both targeted to begin operations in the first quarter of 2028.
Total quarterly natural gas sales were up 17.26% to 3.04 billion British thermal units per day (BBtu/d) from the previous year, while NGL pipeline transportation volumes rose about 20.5% to 1,016.8 thousand barrels per day.
NGL sales rose to 1.30 billion barrels per day from 1.19 billion barrels per day a year earlier.
NGLs are hydrocarbon liquids such as ethane, propane and butane, which are used as fuels for heating, refrigeration and gasoline blending, among others.
For the fourth quarter, the company reported adjusted core earnings of $1.4 billion, compared with analysts’ estimates of $1.5 billion.
The Houston, Texas-based company projected adjusted core earnings to be between $5.7 billion and $5.9 billion, beating analysts' estimates of $5.5 billion, according to data compiled by LSEG.