Targa Resources Corp. announced the execution of new long-term, integrated midstream agreements with subsidiaries of ExxonMobil, further strengthening the parties’ strategic relationship across the Permian Basin.
Targa has entered into long-term fee-based agreements with ExxonMobil for integrated natural gas gathering and processing (G&P) and downstream services in the Permian Basin. These agreements meaningfully add to and extend our strategic relationship with ExxonMobil with significant acreage dedications in the Delaware and Midland basins under 20-year agreements.
In the Permian Delaware, our agreements with ExxonMobil add significant new acreage dedications for integrated fee-based services, including gathering, processing, treating, NGL transportation, and fractionation through 2046.
Key points from the Targa / Exxon announcement:
- Expanded midstream agreements: Targa Resources Corp. executed 20-year fee-based agreements with ExxonMobil to provide natural gas gathering, processing, treating, and liquid fractionation services across the Permian Basin through 2046.
- New gas plant developments: To support customer growth, Targa Resources Corp. plans to construct three natural gas processing plants in the Delaware Basin—Wrangler, Ranger and Ranger II—adding a combined capacity of 825 million cubic feet per day by the first half of 2028.
- Pipeline infrastructure and capital outlook: The company will construct the 70-mile Bull Run II natural gas pipeline to the Waha hub and raised its 2026 growth capital estimate to $5 billion to support the expansion.
In the Permian Midland, our agreements add new acreage dedications and extend our existing fee-floor gathering and processing agreements through 2046. The agreements in both the Delaware and Midland include 20-year NGL dedications to Targa’s logistics and transportation (L&T) systems.
The new commercial agreements will add substantial long-term volume growth across Targa’s integrated wellhead to water position, utilizing our existing infrastructure, projects currently underway, and planned future system expansions. Targa’s commercial success is a result of our proven execution capabilities, expansive integrated footprint and strong operational reliability. We expect these agreements will add to Targa’s overall growth rate over the medium and long term.
“We are excited to meaningfully expand our strategic relationship with ExxonMobil,” said Matt Meloy, Targa’s Chief Executive Officer. “Our track record has positioned us as an attractive partner, and a provider of exceptional execution and reliability for our producer customers. As the largest gatherer and processor in the Permian, we continue to invest across our footprint and our execution allows Targa the unmatched ability to handle our customers’ long-term production growth plans. We expect this expansion of our strategic relationship with ExxonMobil to meaningfully add to Targa’s strong growth rate well into the next decade and bolster our outlook for durable and growing adjusted free cash flow over the long term.”
Growth project update and 2026 capital outlook
To accommodate our customers’ continued growth plans and these new commercial agreements, Targa announced three new natural gas processing plants in the Permian Delaware, the Wrangler, Ranger and Ranger II plants, with aggregate capacity of ~825 million cubic feet per day (MMcf/d). The three new plant additions are expected to be in service in the first half of 2028 and we are evaluating up to five additional new processing plants to accommodate expected production growth in the area over the longer term.
Targa is also evaluating the timing of an additional fractionation train in Mont Belvieu.
Targa also announced a new ~70-mile natural gas pipeline as part of our Bull Run residue system in the Permian Delaware (Bull Run II). The pipeline will provide natural gas takeaway from the new plant additions announced today to Waha and will be supported by take or pay commitments. Bull Run II is expected to begin operations in the first half of 2028.
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We are updating our estimate for FY26 growth capital to ~$5.0B which incorporates expected investment in the new Delaware processing plants announced today, incremental associated field capital, and the Bull Run II natural gas pipeline. The new commercial success announced today adds long-term visibility to our growth, and we expect our plant, field and downstream infrastructure currently underway will be much needed to accommodate planned volume growth.
