In big news for the energy infrastructure space, Targa Resources Corp. (TRGP) has announced significant new investments in its Permian Basin operations. The announcement includes a new natural gas liquids (NGL) pipeline and incremental natural gas infrastructure.
Targa Makes News With Major Investment
First, Targa is building the new Speedway NGL Pipeline to move NGLs out of the basin. The pipeline will have an initial capacity of 500,000 barrels per day. But future expansions could double the capacity. The pipeline is expected to cost $1.6 billion and come online in the third quarter of 2027.
The new Speedway pipeline comes as the company also announced a new natural gas processing plant. These facilities process natural gas into usable form and separate NGLs from the natural gas stream. The Yeti plant will offer 275 million cubic feet per day (MMcf/d) in processing capacity. TRGP aims to use Speedway to transport NGLs from its existing assets and future additions, including the Yeti plant, to its fractionation and storage complex in Mont Belvieu, Texas. Fractionation facilities process NGLs into purity products like ethane, propane, and butane.
Connecting Pipelines
TRGP also announced a project to better connect its Delaware and Midland natural gas assets in the Permian, using a combination of new and existing pipelines. The project, named Buffalo Run, is expected to be fully complete in early 2028. Overall, these projects boosted TRGP’s expected 2025 capital expenditures from a previous range of $2.85-$3.05 billion to $3.3 billion.
“We have benefited from meaningful volume growth across our Permian Basin assets this year, and our outlook for volume growth in 2026 continues to remain robust,” said Matt Meloy, Targa’s CEO. “Given the NGLs currently flowing through our system and numerous plant additions in progress, we will have significantly more volumes to move on Speedway when it comes into service.”
TRGP’s growth speaks to the continued appeal of midstream investing, which is complemented by healthy yields. TRGP is a top-10 holding in the Alerian Energy Infrastructure ETF (ENFR ). ENFR tracks the Alerian Midstream Energy Select Index (AMEI), which is yielding 5.3% as of October 1.
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