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HOUSTON - Targa Resources Corp. (NYSE:TRGP), a $36 billion market cap energy infrastructure company with a solid financial health rating according to InvestingPro, announced Tuesday plans to construct the Speedway NGL Pipeline and a new gas processing plant to support growing production in the Permian Basin.
The Speedway pipeline will transport natural gas liquids (NGLs) from Targa’s Permian Basin assets to its fractionation complex in Mont Belvieu, Texas. The 500-mile, 30-inch diameter pipeline will have an initial capacity of 500,000 barrels per day, expandable to 1 million barrels per day. The project is expected to begin operations in the third quarter of 2027 at an estimated cost of $1.6 billion.
Targa also announced the construction of the Yeti gas processing plant in the Permian Delaware basin, with a capacity of 275 million cubic feet per day. The plant is scheduled to begin operations in the third quarter of 2027.
Additionally, the company plans to build Buffalo Run, which includes a 35-mile natural gas pipeline in the Permian Midland and a 55-mile conversion of an existing pipeline to natural gas service. Buffalo Run will connect Targa’s Midland and Delaware intra-basin natural gas systems and is expected to be completed in stages by early 2028.
"Speedway is critical to the continued execution of our core integrated wellhead to water strategy, will generate attractive and growing fee-based cash flows, and will provide Targa with significant operating leverage once in service," said Matt Meloy, Targa’s Chief Executive Officer, in the press release.
The company now estimates its total net growth capital expenditures for 2025 to be approximately $3.3 billion, including already ordered pipe for Speedway and long-lead items for the Yeti plant. With revenue of $17.1 billion in the last twelve months and a healthy dividend yield of 2.37%, Targa has demonstrated strong financial performance. InvestingPro analysis reveals the company has maintained dividend payments for 15 consecutive years, with impressive dividend growth of 33.33% in the last year.
Targa currently transports about 1 million barrels per day of NGLs on its existing transportation system and is constructing five gas processing plants in the Permian that will come online over the next two years. Analysts maintain a strong bullish consensus on the stock, with InvestingPro data showing price targets ranging from $185 to $240 per share. For deeper insights into Targa’s growth potential and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Targa Resources reported its second-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $1.90, slightly above the anticipated $1.88. However, the company fell short on revenue, posting $4.26 billion against the forecasted $4.77 billion. Goldman Sachs maintained a Buy rating on Targa Resources while adjusting its price target to $186, citing increased capital expenditure. Meanwhile, CFRA raised its price target to $177, reflecting strong pipeline volumes and using a valuation model based on projected 2026 EBITDA. UBS reiterated its Buy rating, emphasizing Targa’s strategic advantages in the Delaware Basin and its involvement in the Blackcomb pipeline project. BMO Capital initiated coverage with an Outperform rating, expressing confidence in Targa’s growth potential despite a challenging rig environment in the Permian Basin. These developments highlight the ongoing analyst interest and varied perspectives on Targa Resources’ future performance.
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