Targa Resources Partners LP, together with its subsidiaries, owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets. The company is a subsidiary of Targa Resources Corp. Targa Resources GP LLC is the general partner of the company.
The company engages primarily in the business of gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas; transporting, storing, fractionating, treating, and purchasing a...
Targa Resources Partners LP, together with its subsidiaries, owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets. The company is a subsidiary of Targa Resources Corp. Targa Resources GP LLC is the general partner of the company.
The company engages primarily in the business of gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas; transporting, storing, fractionating, treating, and purchasing and selling natural gas liquids (NGLs) and NGL products, including services to liquefied petroleum gas (LPG) exporters; and gathering, storing, terminaling, and purchasing and selling crude oil.
Segments
The company operates through two segments, Gathering and Processing; and Logistics and Transportation.
Gathering and Processing segment
This segment consists of gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas and gathering, storing, terminaling, and purchasing and selling crude oil. The gathering or purchase of natural gas consists of aggregating natural gas produced from various wells through varying diameter gathering lines to processing plants. The processing of natural gas consists of the extraction of imbedded NGLs and the removal of water vapor and other contaminants to form a stream of marketable natural gas, commonly referred to as residue gas, and a stream of mixed NGLs. Once processed, the residue gas is transported to markets through residue gas pipelines. End-users of residue gas include large commercial and industrial customers, as well as natural gas and electric utilities serving individual consumers. The company sells its residue gas either directly to such end-users or to marketers into intrastate or interstate pipelines, which are located in close proximity or with ready access to its facilities. The gathering or purchase of crude oil consists of aggregating crude oil production through its pipeline gathering systems, which deliver crude oil to a combination of other pipelines, rail and truck.
The company obtains additional natural gas and crude oil supply in its operating areas by contracting for production from new wells or by capturing existing production currently gathered by others.
This segment’s assets are located in the Permian Basin of West Texas and Southeast New Mexico (including the Midland, Central and Delaware Basins); the Eagle Ford Shale in South Texas; the Barnett Shale in North Texas; the Anadarko, Ardmore, and Arkoma Basins in Oklahoma (including the SCOOP (South Central Oklahoma Oil Province) and STACK (Sooner Trend, Anadarko, Canadian and Kingfisher)) and South Central Kansas; the Williston Basin in North Dakota (including the Bakken and Three Forks plays) and in the onshore and near offshore regions of the Louisiana Gulf Coast and the Gulf of Mexico.
The natural gas processed in this segment is supplied through the company’s gathering systems, which in aggregate, consist of approximately 28,700 miles of natural gas pipelines and include 42 owned and operated processing plants. During 2020, the company processed an average of 4,398.3 million cubic feet (MMcf) per day (/d) of natural gas and produced an average of 528.9 thousand barrels (MBbl)/d of NGLs. In addition to its natural gas gathering and processing, the Badlands operations include a crude oil gathering system and four terminals with crude oil operational storage capacity of 205 MBbl, and its Permian operations include a crude oil gathering system and one terminal with crude oil operational storage capacity of 10 MBbl. In January 2020, the company closed on the sale of the Delaware crude system. During 2020, the company purchased or gathered an aggregate average of 199.8 MBbl/d of crude oil in the Badlands and Permian.
This segment’s operations consist of Permian Midland and Permian Delaware (also referred to as ‘Permian’); SouthTX, North Texas, SouthOK, WestOK (also referred to as ‘Central’); Coastal; and Badlands each as described below:
Permian Midland
The Permian Midland system consists of approximately 7,000 miles of natural gas gathering pipelines and fifteen processing plants with an aggregate nameplate capacity of 2,399 MMcf/d, all located within the Permian Basin in West Texas. Ten of these plants and 4,900 miles of gathering pipelines belong to a joint venture (‘WestTX’), in which the company has an approximate 72.8% ownership. Pioneer, a major producer in the Permian Basin, owns the remaining interest in the WestTX system.
In addition, the company is constructing the Heim Plant, a 200 MMcf/d cryogenic natural gas processing plant, which was relocated from its North Texas system to its Permian Midland system. The Heim Plant is expected to begin operations in the fourth quarter of 2021.
Permian Delaware
The Permian Delaware system consists of approximately 6,100 miles of natural gas gathering pipelines and eight processing plants with an aggregate capacity of 1,240 MMcf/d, all within the Delaware Basin in West Texas and Southeastern New Mexico.
The Permian Midland and Permian Delaware systems are interconnected and volumes may flow from one system to the other.
SouthTX
The South Texas system contains approximately 870 miles of high-pressure and low-pressure gathering and transmission pipelines and three natural gas processing plants in the Eagle Ford Shale. The South Texas system processes natural gas through the Silver Oak I, Silver Oak II and Raptor gas processing plants. The Silver Oak I and II Plants (the ‘Silver Oak Plants’) are each 200 MMcf/d cryogenic plants. The Raptor Plant is a 260 MMcf/d cryogenic plant.
The company participates in, and serves as operator for, two joint ventures in South Texas with a subsidiary of Southcross Energy Partners LLC, which consist of its 75% share in T2 LaSalle Gathering Company LLC (T2 LaSalle) and its 50% share in T2 Eagle Ford Gathering Company LLC (T2 Eagle Ford). T2 LaSalle owns approximately 60 miles of high-pressure gathering pipeline and T2 Eagle Ford owns approximately 120 miles of high-pressure gathering pipelines. Together, these two pipelines gather and transport gas to the Silver Oak Plants. T2 Eagle Ford also owns the residue gas delivery pipelines downstream of the Silver Oak Plants.
The company also participates in a third joint venture in South Texas with Sanchez Midstream Partners LP (Sanchez Midstream). It owns a 50% interest in the Carnero Joint Venture (Carnero) and Sanchez Midstream owns the remaining 50% interest. Carnero owns and the company operates the Silver Oak II Plant, the Raptor Plant and approximately 45 miles of high-pressure gathering pipeline located in La Salle, Dimmitt and Webb counties, Texas that connects Mesquite Energy’s Catarina Ranch gathering system and Comanche Ranch acreage to the Raptor Plant.
North Texas
North Texas includes the Chico gathering system in the Fort Worth Basin, which gathers gas from the Barnett Shale and Marble Falls plays for the Chico plant. The system consists of approximately 4,700 miles of pipelines gathering wellhead natural gas. The Chico plant has an aggregate processing capacity of 265 MMcf/d and an integrated fractionation capacity of 15 MBbl/d.
SouthOK
The SouthOK gathering system is located in the Ardmore and Anadarko Basins and includes the Golden Trend, SCOOP, and Woodford Shale areas of southern Oklahoma. The gathering system has approximately 2,000 miles of pipelines.
The SouthOK system includes six separate operational processing plants with a total nameplate capacity of 710 MMcf/d, including the Coalgate, Stonewall, Hickory Hills and Tupelo facilities, which are owned by the company’s Centrahoma Processing LLC (Centrahoma) Joint Venture, and its wholly-owned Velma and Velma V-60 plants. The company has a 60% ownership interest in Centrahoma. The remaining 40% ownership interest in Centrahoma is held by MPLX, LP (MPLX).
WestOK
The WestOK gathering system is located in north central Oklahoma and southern Kansas’ Anadarko Basin and includes the Woodford shale and the STACK. The gathering system expands into 14 counties with approximately 6,600 miles of natural gas gathering pipelines.
The WestOK system has a total nameplate capacity of 400 MMcf/d with two separate cryogenic natural gas processing plants known as the Waynoka I and Waynoka II facilities.
Coastal
The company’s Coastal assets, located in and offshore South Louisiana, gather and process natural gas produced from shallow-water central and western Gulf of Mexico natural gas wells and from deep shelf and deep-water Gulf of Mexico production via connections to third-party pipelines or through pipelines owned by it. Coastal consists of approximately 2,075 MMcf/d of natural gas processing capacity, 11 MBbl/d of integrated fractionation capacity, 1,000 miles of onshore gathering system pipelines, and 170 miles of offshore gathering system pipelines. The processing plants consist of three wholly-owned and operated plants, one partially owned and operated plant, and one partially owned plant, which is non-operated. The company’s Coastal plants have access to markets across the U.S. through the interstate natural gas pipelines to which they are interconnected. The industry continues to rationalize gas processing capacity along the western Louisiana Gulf Coast with most of the producer volumes going to efficient plants, such as its Lowry and Gillis plants.
Badlands
The Badlands operations are located in the Bakken and Three Forks Shale plays of the Williston Basin in North Dakota; and include approximately 510 miles of crude oil gathering pipelines, 120 MBbl of operational crude oil storage capacity at the Johnsons Corner Terminal, 30 MBbl of operational crude oil storage capacity at the Alexander Terminal, 30 MBbl of operational crude oil storage at New Town and 25 MBbl of operational crude oil storage at Stanley. The Badlands assets also include approximately 280 miles of natural gas gathering pipelines and the Little Missouri I-III natural gas processing plants, which have a gross processing capacity of approximately 90 MMcf/d. Additionally, the company operates the 200 MMcf/d Little Missouri 4 plant (‘LM4 Plant’), in which Targa Badlands LLC (Targa Badlands) and Hess Midstream Partners LP each own a 50% interest. The company owns 55% of Targa Badlands through a joint venture with GSO Capital Partners and Blackstone Tactical Opportunities (collectively, ‘GSO’). Targa Badlands pays a minimum quarterly distribution (MQD) to GSO and the company, with GSO having a priority right to the MQDs.
Logistics and Transportation segment
This segment is also referred to as the company’s Downstream Business. The company’s Downstream Business includes the activities and assets necessary to transport and convert mixed NGLs into NGL products and also includes other assets and value-added services. This segment includes Grand Prix NGL Pipeline (Grand Prix), as well as its equity interest in Gulf Coast Express Pipeline LLC (GCX). The associated assets, including these pipelines, are generally connected to and supplied in part by this segment, and except for the pipelines and smaller terminals, are located predominantly in Mont Belvieu and Galena Park, Texas, and in Lake Charles, Louisiana. Its fractionation, pipeline transportation, storage and terminaling businesses include approximately 2,100 miles of company-owned pipelines to transport mixed NGLs and specification products.
This segment also transports, distributes, purchases, and sells and markets NGLs via terminals and transportation assets across the U.S. The company owns or markets products at terminal facilities in a number of states, including Alabama, Arizona, California, Florida, Kentucky, Louisiana, Mississippi, New Jersey, Tennessee, and Texas. The geographic diversity of the company’s assets provides direct access to many NGL customers, as well as markets via trucks, barges, ships, rail cars and open-access regulated NGL pipelines owned by third parties.
Pipelines
The company’s primary pipeline assets are Grand Prix and its equity interest in GCX.
Grand Prix connects the company’s gathering and processing positions throughout the Permian Basin, North Texas, and Southern Oklahoma (as well as third-party positions) to its fractionation and storage complex in the NGL market hub at Mont Belvieu, Texas. Grand Prix transports NGLs from the Permian Basin on a 24-inch diameter pipeline with a capacity of 410 MMBbl/d, expandable to 550 MMBbl/d, and from North Texas and Southern Oklahoma via pipeline of varying capacity, which both connect to a 30-inch diameter segment into Mont Belvieu. The final segment has a 450 MMBbl/d capacity, which is expandable to 950 MMBbl/d. The company owns a 56% interest in the Permian and Mont Belvieu segments of Grand Prix through the Grand Prix Joint Venture.
GCX connects the Waha hub in West Texas and other receipt points, including many of the company’s Midland Basin processing facilities, to Agua Dulce in South Texas and other delivery points, and has a capacity of 2.0 billion cubic feet (Bcf)/d. Targa GCX Pipeline LLC, of which it owns a 20% interest, owns a 25% interest in GCX, which is operated by Kinder Morgan Texas Pipeline LLC.
Additionally, through the company’s 50% ownership interest in Cayenne Pipeline, LLC, it operates the Cayenne pipeline, which transports mixed NGLs from VESCO in Venice, Louisiana, to an interconnection with a third-party NGL pipeline in Toca, Louisiana.
Fractionation
Contracts for the company’s NGL fractionation services are fee-based arrangements. At its Mont Belvieu operated facility, the company has eight fractionation trains, representing a gross capacity of 813.0 MBbl/d, including five fractionation trains with an aggregate capacity of 493.0 MBbl/d that are part of its 88%-owned Cedar Bayou Fractionators; Train 6, a 100 MBbl/d fractionation train (Train 6), a joint venture between the company and Stonepeak Infrastructure Partners, in which it owns a 20% interest; Train 7, a 110 MBbl/d fractionation train, a joint venture between the company and Williams Companies, Inc., which began operations in the first quarter 2020, in which it owns an 80% equity interest; and Train 8, a 110 MBbl/d fractionation train, which began operations in the third quarter 2020 and is wholly-owned by the company. Certain fractionation-related infrastructure for Train 6 and Train 7, such as storage caverns and brine handling, were funded and are owned 100% by the company. Its fractionation trains are fully integrated with its existing Gulf Coast NGL storage, terminaling and delivery infrastructure, which includes an extensive network of connections to key petrochemical and industrial customers, as well as its LPG export terminal at Galena Park on the Houston Ship Channel.
The company additionally has a wholly-owned and operated fractionation facility in Lake Charles, Louisiana, representing a gross capacity of 55.0 MBbl/d. In addition to its operated facilities, the company holds an equity investment in, Gulf Coast Fractionators LP (GCF), also located at Mont Belvieu. In January 2021, the GCF facility was temporarily idled, but is available for reactivation, subject to prevailing market conditions and agreement with its partners. The company will assume operatorship of GCF in the first half of 2021.
The company also owns fractionation assets at Chico, Monument and Gillis, which are included in this segment. In addition, it has a natural gasoline hydrotreater at Mont Belvieu, Texas that removes sulfur from natural gasoline, allowing customers to meet stringent fuel content standards. The facility has a capacity of 35 MBbl/d and is supported by long-term fee-based contracts that have certain guaranteed volume commitments and/or provisions for deficiency payments.
NGL Storage and Terminaling
The company’s NGL storage assets provide warehousing of mixed NGLs, NGL products and petrochemical products in underground wells, which allows for the injection and withdrawal of such products at various times in order to meet supply and demand cycles. Similarly, the company’s terminaling operations provide the inbound/outbound logistics and warehousing of mixed NGLs, NGL products and petrochemical products in above-ground storage tanks. Its NGL underground storage and terminaling facilities serve single markets, such as propane, as well as multiple products and markets. The Mont Belvieu and Galena Park facilities have pipeline connections for mixed NGL supply and delivery of component NGLs, including Grand Prix. In addition, some of its facilities are connected to marine, rail and truck loading and unloading facilities that provide services and products to its customers. The company provides long and short-term storage and terminaling services and throughput capability to third-party customers for a fee.
Across this segment, the company owns 34 storage wells at its facilities with a gross NGL storage capacity of approximately 75 million barrels (MMBbl); and operates 7 non-owned wells, the usage of which may be limited by brine handling capacity, which is utilized to displace NGLs from storage.
The company operates its storage and terminaling facilities to support its key fractionation facilities at Mont Belvieu and Lake Charles for receipt of mixed NGLs and storage of fractionated NGLs to service the petrochemical, refinery, export and heating customers/markets, as well as its wholesale domestic terminals that focus on logistics to service the heating market customer base. The company’s international export assets include its facilities at both Mont Belvieu and the Galena Park Marine Terminal near Houston, Texas, which have the capability to load propane, butanes and international grade low ethane propane. The facilities have an effective export capacity of up to 15 MMBbl per month, but given the mix of propane and butane demand, vessel size and availability of supply, and a variety of other factors, its effective working capacity is estimated to be approximately 12.5 MMBbl per month. The company has the capability to load very large gas carrier vessels, alongside small and medium sized export vessels. It continues to experience demand growth for the U.S.-based NGLs (both propane and butane) for export into international markets and is in the process of enhancing its loading capabilities.
NGL Distribution and Marketing
The company markets its own NGL production and also purchases component NGL products from other NGL producers and marketers for resale. Additionally, it purchases product for resale in its Logistics and Transportation segment, including exports. During the year ended December 31, 2020, the company’s distribution and marketing services business sold an average of 752.5 MBbl/d of NGLs.
The company purchases mixed NGLs at a monthly pricing index less applicable fractionation, transportation and marketing fees; and resells these component products to petrochemical manufacturers, refineries and other marketing and retail companies. It also earns margins by purchasing and reselling NGL products in the spot and forward physical markets. To effectively serve its distribution and marketing customers, the company contracts for and use many of the assets included in its Logistics and Transportation segment.
Wholesale Domestic Marketing
The company’s wholesale domestic propane marketing operations primarily sell propane and related logistics services to major multi-state retailers, independent retailers, and other end-users. The company’s propane supply primarily originates from both its refinery/gas supply contracts and its other owned or managed Logistics and Transportation assets.
The wholesale domestic propane marketing business is significantly impacted by seasonal and weather-driven demand, particularly in the winter.
Refinery Services
In the company’s refinery services business, it provides NGL balancing services through contractual arrangements with refiners to purchase and/or market propane and to supply butanes. The company uses its commercial transportation assets and contracts for and uses the storage, transportation and distribution assets included in its Logistics and Transportation segment to assist refinery customers in managing their NGL product demand and production schedules. This includes both feedstocks consumed in refinery processes and the excess NGLs produced by other refining processes.
Commercial Transportation
The company’s NGL transportation and distribution infrastructure includes a wide range of assets supporting both third-party customers and the delivery requirements of its marketing and asset management business. The company provides fee-based transportation services to refineries and petrochemical companies throughout the Gulf Coast area. Its assets are also deployed to serve its wholesale domestic distribution terminals, fractionation facilities, underground storage facilities and pipeline injection terminals. These distribution assets provide a variety of ways to transport products to and from its customers.
The company’s transportation assets, as of December 31, 2020, included 694 railcars that it leased and managed, 124 leased and managed transport tractors, and 2 company-owned pressurized NGL barges.
Natural Gas Marketing
The company also markets natural gas available to it from the Gathering and Processing segment, purchases and resells natural gas in selected U.S. markets, and manages the scheduling and logistics for these activities.
Regulation
With regard to the company’s physical purchases and sales of the energy commodities and any related hedging activities that it undertakes, it is required to observe anti-market manipulation laws and related regulations enforced by FERC and/or the Commodities Futures Trading Commission.
The company has obtained a certificate of public convenience and necessity from FERC waiving certain of the Commission’s tariff and rate regulations.
Targa NGL Pipeline Company LLC, Targa Gulf Coast NGL Pipeline LLC, and the Grand Prix Joint Venture have interstate NGL pipelines that are considered common carrier pipelines subject to regulation by FERC under the Interstate Commerce Act (the ICA). Unless covered by a waiver, the ICA requires that it maintains tariffs on file with FERC for interstate movements of liquids on its pipelines. The company has multiple NGL pipelines that have qualified for a waiver of applicable FERC regulatory requirements under the ICA based on circumstances.
The company’s intrastate pipelines located in Texas are regulated by the Railroad Commission of Texas (the RRC) and are required to have tariffs on file with the RRC. Some of these Texas intrastate pipelines also transport natural gas in interstate commerce pursuant to Section 311 of the Natural Gas Policy Act of 1978 (NGPA). Specifically, TPL SouthTex Transmission Company LP and Targa Midland Gas Pipeline LLC provide NGPA Section 311 service.
The company’s Louisiana intrastate pipeline, Targa Louisiana Intrastate LLC, and the rates and terms of service on the pipeline are subject to regulation by the Office of Conservation of the Louisiana Department of Natural Resources (DNR).
The company’s intrastate NGL pipelines in Texas transport mixed and purity NGL streams between its Mont Belvieu and Galena Park, Texas facilities. With respect to intrastate movements, these pipelines are not subject to FERC regulation, but are subject to rate regulation by the RRC.
The company’s intrastate NGL pipelines in Louisiana gather mixed NGLs streams that it owns from processing plants in Louisiana and deliver such streams to the Gillis and Lake Charles fractionators in Lake Charles, Louisiana.
Additionally, through its 50% ownership interest in Cayenne Pipeline, LLC, it operates the Cayenne pipeline, which transports mixed NGLs from the Venice gas plant in Venice, Louisiana, to an interconnection with a third-party NGL pipeline in Toca, Louisiana. These pipelines are not subject to FERC regulation or rate regulation by the DNR. In 2019, the Louisiana Public Service Commission (LPSC) approved applications to register certain pipelines of Cayenne Pipeline, LLC and Targa Downstream LLC in accordance with the LPSC 2015 General Order, Docket No. R-33390.
Many of the company’s natural gas, NGL and crude oil pipelines are subject to regulation by the federal Pipeline and Hazardous Materials Safety Administration, an agency of the U.S. Department of Transportation, under the Natural Gas Pipeline Safety Act of 1968, as amended, with respect to natural gas; and the Hazardous Liquids Pipeline Safety Act of 1979, as amended, with respect to crude oil, NGLs and condensates.
Competition
The company’s major competitors for natural gas supplies in its Permian and Central operating regions include DCP Midstream Partners (DCP); Enable Midstream Partners, L.P.; Energy Transfer, L.P. (Energy Transfer); Enlink Midstream, LLC; Enterprise Products Partners L.P. (Enterprise); Kinder Morgan, Inc. (Kinder Morgan); MPLX; ONEOK, Inc. (ONEOK); WTG Gas Processing, L.P; Western Midstream Partners, L.P.; and several other pipeline companies.
The company’s competitors for the gathering and/or purchase and sale of crude oil in North Dakota include Crestwood Equity Partners L.P.; Kinder Morgan; MPLX; Hess Midstream, L.P.; Summit Midstream Partners, L.P.; Paradigm Energy Partners LLC; and Oasis Midstream Partners L.P.
The company also competes for NGL supplies for Grand Prix. Its major competitors for NGL supplies in its operating regions include DCP; Energy Transfer; Enterprise; ONEOK; and EPIC Midstream Holdings, L.P. The company’s primary competitors in providing export services to its customers are Enterprise, LoneStar, and Phillips 66.
The company competes with several other NGL marketing companies, including BP p.l.c.; DCP; Energy Transfer; Enterprise; and ONEOK.
Asset Sales
In 2020, the company closed on the sale of assets in Channelview, Texas.
History
Targa Resources Partners LP, a Delaware limited partnership, was founded in 2006.
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