Targa Resources has signed new 20-year, fee-based agreements with ExxonMobil covering integrated natural gas gathering, processing and downstream services in the Permian Basin. The agreements include significant acreage dedications in both the Delaware and Midland basins and extend existing Midland Basin arrangements through 2046, strengthening the long-term commercial relationship between the two companies.
To support ExxonMobil’s development activity and broader customer growth, Targa plans to construct three natural gas processing plants—Wrangler, Ranger and Ranger II—in the Delaware Basin. Together, the facilities will add approximately 825 million cubic feet per day (MMcf/d) of processing capacity. All three plants are expected to enter service during the first half of 2028.
Targa also plans to develop the Bull Run II pipeline, a roughly 70-mile natural gas pipeline that will move gas from the new processing facilities to the Waha hub in West Texas. The pipeline is backed by take-or-pay commitments and is also scheduled to begin operations in the first half of 2028. Targa said it is evaluating as many as five additional Delaware Basin processing plants to accommodate longer-term production growth.
The expanded development program is contributing to higher capital spending. Targa increased its 2026 growth capital estimate to approximately $5 billion, including spending associated with the three processing plants, related field infrastructure and Bull Run II. For contractors and suppliers, the projects create a multi-year pipeline of potential demand across gas processing, gathering systems, pipeline construction, compression, fabrication, electrical and instrumentation, automation, civil construction and other midstream services.
Industry Impact
The investment highlights the infrastructure requirements accompanying continued Permian Basin development, particularly in the Delaware Basin. Long-term commitments between a major producer such as ExxonMobil and one of the Permian’s largest midstream operators provide greater visibility for new processing and takeaway infrastructure while creating additional construction and supply-chain opportunities ahead of the planned 2028 start-up dates.
Two-Sentence Summary
Targa Resources signed 20-year midstream agreements with ExxonMobil and plans three Delaware Basin gas processing plants totaling approximately 825 MMcf/d of capacity. The company will also build the 70-mile Bull Run II pipeline to Waha, with the new infrastructure targeted to enter service in the first half of 2028.
Author: phinds