Editor's note: This article has been updated with additional information and clarification from Targa Resources, including the status of its Apex Pipeline project.

After setting a throughput record in its Permian Basin system, Targa Resources executives discussed moving new production facilities and their expectation that another gas pipeline project out of the region would move forward this year.

“Targa’s number one priority is making sure gas moves out of the basin, that our producers can fill their gas into our plants, and we can move gas for producers out of our plants,” said Bobby Muraro, chief commercial officer, during Targa’s May 2 first-quarter earnings call. “And we are working on multiple fronts, multiple options, multiple pipes — all that have very good traction.”

On the call, executives were confident that one of several proposed major Permian gas pipeline projects, planned by various midstream companies, would get a go-ahead this year.

“I fully expect, as I’ve said before, that a pipe will go FID by the end of this year,” Muraro said.

Targa’s proposed Apex pipeline is one of the candidates, though the company is keeping its options open, a Targa spokesperson said.

Targa received approval from the Texas Railroad Commission for the Apex Pipeline in March 2023. As designed, the Apex would be a 42-inch diameter, 563-mile natural gas egress line out of the Permian stretching toward facilities in Houston and Southwest Louisiana. When the plan was released, East Daley Analytics estimated the line’s capacity would be about 2 Bcf/d, and the project would cost between $2 billion and $2.5 billion.

Natural gas egress capacity out of the Permian Basin has been a growing issue. Prices at the Waha gas hub near Pecos, Texas, have generally been in negative territory for more than a month, thanks to spring pipeline maintenance on an already tight system.

Several natural gas pipeline projects are in various stages of development. The Matterhorn Express Pipeline, a joint project of WhiteWater, EnLink, MPLX and Devon Energy, is well underway and expected to begin service in third-quarter 2024.

However, Targa said there is still a need for one, if not more, natural gas lines out of the Permian to meet current and future demand for U.S. LNG exports and electrical power generation within the U.S.

Targa is also beefing up its capacity to handle a growing NGL export market.

In its earnings statement, Targa announced the construction of a new 275 MMcf/d cryogenic natural gas processing plant, Pembrook II, in the Midland Basin. The plant is scheduled to go online by the end of 2025. Targa is also moving forward on a new train at its Mont Belvieu facility east of Houston — a new 150,000 bbl/d fractionator, which is expected to be completed in the second half of 2026.

“Looking ahead, our premier Permian supply aggregation, coupled with our integrated NGL system, positions us nicely to continue to generate high-return organic opportunities and be able to continue to return incremental capital to our shareholders,” said Targa CEO Matt Meloy.

The company anticipated the need for the projects last year, and the construction will have no impact on Targa’s $3.8 billion capex budget for 2024 and 2025, Meloy said.

Earnings, results

For the first quarter, Targa reported revenues of $4.56 billion, a 1% revenue increase over first-quarter of 2023. First-quarter 2024 revenues beat market expectations by about $260 million.

While gas and NGL volumes from the Permian continued to rise, the midstream company also saw a decrease in natural gas flows from shale basins in Southeast Texas, down 7% and North Dakota, down 4%.

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