In the latest earnings release, Targa Resources showcased its impressive performance in the Permian Basin, reaffirming its commitment to expanding capacity in this prolific region. The third quarter of 2024 was marked by record volumes and the announcement of key infrastructure projects, including the Falcon II Plant and East Driver Plant, which are set to meet the growing demand from producers.

Record Volumes in the Permian Basin

Targa Resources reported record natural gas inlet volumes in the Permian Basin during Q3 2024, driven by increased producer activity and strategic investments in new infrastructure. The company highlighted a significant 18% year-over-year growth in total natural gas inlet volumes, reaching 5,982 MMcf/d. This achievement underscores Targa’s ability to capitalize on the robust production growth in the Permian, particularly in the Midland and Delaware sub-basins.

Key factors contributing to this record performance include:

Expansion of Gathering and Processing Capacity: Targa brought new plants online, such as the Greenwood II plant in Permian Midland, which commenced operations in early Q4 2024.
Launch of Daytona NGL Pipeline: The start-up of this pipeline enhanced Targa’s NGL transportation capabilities, facilitating the movement of increased volumes from the Permian to key downstream markets.

New Growth Projects: Falcon II Plant and East Driver Plant

To sustain its growth trajectory and meet the needs of its customers, Targa announced two new cryogenic natural gas processing plants: the Falcon II Plant in the Delaware Basin and the East Driver Plant in the Midland Basin.

1. Falcon II Plant

Location: Permian Delaware Basin.
Capacity: 275 million cubic feet per day (MMcf/d).
Expected Start-Up: Second quarter of 2026.
Strategic Significance: The Falcon II Plant is designed to handle increasing volumes of natural gas production from the Delaware Basin, a core area of growth for many leading producers. This facility will enhance Targa’s processing capacity, ensuring efficient handling of higher inlet volumes and supporting continued development in this resource-rich region.

2. East Driver Plant

Location: Permian Midland Basin.
Capacity: 275 MMcf/d.
Expected Start-Up: Third quarter of 2026.
Strategic Significance: Positioned in the Midland Basin, the East Driver Plant will complement Targa’s existing infrastructure, catering to the rising demand for gas processing services. The plant’s construction aligns with the anticipated surge in production from new drilling activities, offering a critical boost to Targa’s processing capabilities in one of the most active areas of the Permian.

Positioning for Future Growth

The addition of the Falcon II and East Driver plants highlights Targa’s forward-looking approach, anticipating strong production growth in the Permian through 2026. These projects are part of a broader strategy to expand midstream capacity and support the increasing supply of natural gas and NGLs from the region.

In Q3 2024, Targa also commenced operations at its new 120 MBbl/d Train 10 fractionator at Mont Belvieu, further enhancing its downstream capabilities. This infrastructure expansion, combined with the ongoing construction of the Train 11 fractionator, positions Targa to capture greater value from increased NGL production in the Permian.

Outlook for 2025 and Beyond

Looking ahead, Targa expects continued strong activity levels in the Permian Basin, driven by robust producer investments and rising natural gas demand. The company has raised its adjusted EBITDA forecast for 2024, estimating full-year results to exceed the upper end of its $3.95 billion to $4.05 billion range. Additionally, Targa plans to increase its annual dividend per share to $4.00 in 2025, reflecting confidence in its financial outlook and commitment to shareholder returns.

With its strategic expansions in the Permian, Targa Resources is well-positioned to capture growth opportunities, enhance its processing and transportation network, and deliver reliable midstream services to meet the evolving needs of its customers.

This blog post provides an overview of Targa Resources’ latest updates and plans for the Permian Basin. If you have any questions or need more detailed insights, feel free to reach out!