Baytown-West Chambers County Economic Development Foundation | 1300 Rollingbrook Dr., Suite 610 | Baytown, TX 77521 | 281.420.2961 |

Targa buying out Blackstone’s stake in pipeline system with $1.05B deal

January 3, 2023

Targa Resources Corp. (NYSE: TRGP) is boosting its ownership stake in a natural gas liquids pipeline with a $1.05 billion deal.

The Houston-based midstream company agreed to acquire a 25% interest in Targa's Grand Prix NGL Pipeline from Blackstone Energy Partners, which manages energy-focused private equity funds for New York-based Blackstone Inc. (NYSE: BX), the companies announced Jan. 3. Targa, which currently owns a 75% stake in the natural gas liquids pipeline system, will assume full ownership of Grand Prix when the deal closes.

The cash deal is expected to close during the first quarter.

The Grand Prix system connects Targa's gathering and processing footprints in the Permian Basin, North Texas and southern Oklahoma with the company's fractionation and storage complex in Mont Belvieu, located roughly 25 miles east of Houston. The Grand Prix system can transport up to 1 million barrels per day of natural gas liquids.

"The performance of our Grand Prix NGL Pipeline has exceeded expectations since it began full operations in the third quarter of 2019, integrating our leading NGL supply aggregation position in the Permian Basin to key demand markets in Mont Belvieu and along the U.S. Gulf Coast," said Targa CEO Matt Meloy.

In November 2022, Targa announced plans to expand the Grand Prix system with a new NGL pipeline. The new Daytona NGL pipeline will transport NGLs from the Permian Basin and connect to the existing Grand Prix system in North Texas. The $650 million expansion project is expected to be in service by the end of 2024, Targa said in regulatory filings.

The company said it expects to benefit from assuming full ownership of the Grand Prix pipeline and a 100% interest the new Daytona pipeline expansion.

"Our business has strong momentum for 2023, and this acquisition further simplifies Targa while also increasing our fee-based margin and providing additional cash-flow stability," Meloy said.

Truist Securities is serving as financial adviser to Targa on the Grand Prix deal, while Vinson & Elkins LLP is serving as legal counsel.

In mid-2022, Targa acquired Dallas-based natural gas processor Lucid Energy Group for $3.55 billion to boost its presence in the Delaware Basin portion of the Permian. Targa is No. 14 on the Houston Business Journal's 2022 Largest Houston-Area Public Companies List, based on its 2021 revenue of $16.95 billion.

By Chris Mathews, Houston Business Journal