Targa Resources Corp., Houston, has executed agreements to acquire Southcross Energy Operating LLC and its subsidiaries in South Texas for $200 million, adding to the company’s current assets in the Eagle Ford shale region.
For Targa, the deal offers the potential to move a currently idle 200 MMcfd plant and continued simplification through acquisition of remaining T2 joint venture interests. Targa participates in, and serve as operator for, two South Texas joint ventures with a Southcross Energy Partners LLC subsidiary, which consist of its 75% share in T2 LaSalle Gathering Co. LLC (T2 LaSalle) and its 50% share in T2 Eagle Ford Gathering Co. LLC (T2 Eagle Ford).
T2 LaSalle owns about 60 miles of high-pressure gathering pipeline and T2 Eagle Ford owns about 120 miles of high-pressure gathering pipelines. Together, the two pipelines gather and transport gas to Targa’s 220 MMcfd cryogenic Silver Oak plants. T2 Eagle Ford also owns the residue gas delivery pipelines downstream of the Silver Oak plants.
Current Southcross assets include two cryogenic gas processing plants with a total capacity of 500 MMcfd, two sour gas treating plants with a total capacity of 200 MMcfd, and about 2,500 miles of pipeline, according to the company website.
The gathering and processing infrastructure lies along the Gulf Coast in South Texas between Houston and Laredo, with direct access to the Corpus Christi ship channel and Agua Dulce market areas. The sour gas gathering and treating system, which lies primarily in Dimmit, Frio, and LaSalle counties, includes more than 50,000 horsepower of compression assets.
Southcross completed a reorganization and emerged from Chapter 11 in early 2020.
The acquisition is expected to close in second-quarter 2022 following customary closing conditions.