Targa Resources Corp. has cut its estimated 2020 net growth capital expenditures (capex) by 32%, to $800-900 million from $1.2-1.3 billion. Most remaining spending is for what the company described as major ongoing growth capital projects in which the capital is already predominantly spent.
The company said it is working with customers across both its gathering and processing and logistics and transportation segments to further refine expectations for 2020, and implications for 2021. Based on the best available information today and assuming a similar commodity price environment, Targa’s preliminary estimate for 2021 net growth capex is $200 million, a 76% reduction on the lowered 2020 net growth capital spending midpoint.
Targa in 2019 sold a 45% interest in Targa Badlands LLC, the entity that holds Targa’s North Dakota oil and natural gas assets, to funds managed by GSO Capital Partners and Blackstone Tactical Opportunities for $1.6 billion in cash. Targa still operates the assets (OGJ Online, Feb. 20, 2019).
The company also last year agreed with Williams Cos. to build the 188-mile Bluestem NGL pipeline from Targa’s Conway fractionator and the southern terminus of the Overland Pass pipeline to an interconnect with its Grand Prix NGL pipeline in Kingfisher County, Okla. (OGJ Online, Feb. 15, 2019).