The Permian basin in the United States has long been the foundation of the American energy sector and boasts several huge international companies with substantial operations. Recently, Targa Resources, a market leader of midstream services in the United States, outlined its plans to develop a 500-mile “Speedway” NGL pipeline that will link the Permian to Mont Belvieu, Texas. The company has been contemplating measures to increase its foothold in the Permian and now has plans to construct the astonishingly long NGL pipeline, along with several other projects.
The 500-mile Natural Gas Liquids pipeline exemplifies the company’s ambitions for the US market
Targa Resources has become one of the largest independent infrastructure companies in North America and boasts a diversified portfolio of significant domestic infrastructure assets that have positioned the United States as the world’s go-to destination for gas supply.
The reality of the impact of sanctions on Russian energy has led the US to become the top destination for the world’s gas and NGL buyers, all frantically searching for a non-Russian energy supplier. The new “cold war” of energy resources between the US and Russia has led many nations that formerly did business with Moscow to enter into purchasing agreements with the US to buy their substantial gas supply.
Targa Resources’ Speedway NGL Pipeline will become the backbone of the US gas sector
The company has noted that the plan is to construct a 30-inch pipeline and associated infrastructure with a start-up capacity of 500,000 barrels per day, which could be doubled to 1 million barrels per day if needed. The expected price tag to build the Speedway NGL Pipeline is hovering around $1.6 billion and is expected to begin service in the third quarter of 2027.
The Speedway NGL pipeline is not the only project being planned by Targa Resources
The firm has confirmed its plan to construct the Yeti processing plant, which will boast a 275 million cubic feet per day capacity that will serve the firm’s growth on the Permian Delaware system. Targa is currently constructing five gas processing plants that will come online over the next by 2027, and has outlined plans to build an additional 35-mile natural gas pipeline that will enhance the company’s connectivity to the Permian operations.
Furthermore, Targa is planning a 55-mile conversion of an existing pipeline into natural gas service, targeting the expansion of its extensive energy infrastructure to accommodate an expected increase in gas demand around the United States and the world. However, some industry analysts have cautioned that the new pipeline could result in substantial spare capacity out of the Permian Basin.
“If Targa sustains the approximate 140,000-barrel-per-day annual NGL growth it achieved during the Grand Prix-Daytona buildout, Speedway’s initial 500,000-barrel-per-day capacity could be filled within about two years after startup. Speedway provides much-needed headroom, though Targa must carefully coordinate fractionation and LPG export expansions to avoid system bottlenecks.” – Julian Renton and Jaxson Fryer of East Daley Analytics
As several energy-rich nations outline their plans to invest heavily in the midstream sector over the coming years, Targa is betting on its vast Permian infrastructure to lead the US into a new era.
With the sanctions on Russia coming into effect, the global energy market is evolving
Targa’s extensive plans for the Permian basin have led the company to become an exemplar of safe and efficient pipeline production. As the world turns its collective back on Russian energy, Moscow has plans to develop its own astonishing pipeline known as the Power of Siberia 2 pipeline. However, that may be just a drop in the sea of change that is washing over the global energy market. Targa’s expansive ambitions have not come as a surprise to some, but the company will need to undertake a pragmatic approach to the project to avoid any issues.
