Targa Resources Corp.

What they do

Targa gathers, compresses, treats, processes and sells natural gas and crude oil through its Gathering and Processing segment, located in the Permian Basin, Eagle Ford, Barnett, Anadarko/Ardmore/Arkoma, Williston Basin and the Louisiana Gulf Coast. Its Logistics and Transportation segment converts mixed NGLs into NGL products and provides transporting, storing, fractionating, terminaling and marketing services, including LPG exports, with Downstream facilities mainly at Mont Belvieu and Galena Park, Texas and Lake Charles, Louisiana. A separate 'Other' category holds unrealized mark-to-market gains and losses on derivative contracts not designated as cash flow hedges.

Revenue drivers

• Gathering and Processing — Earns fees and margins from gathering, compressing, treating, processing and purchasing/selling natural gas, plus crude oil gathering and terminaling. Full-year 2025 consolidated revenue was $17.03B across both segments, with G&P driven by Permian inlet volumes that set records in the second quarter of 2026, increasing more than 450 MMcf/d sequentially despite producer curtailments.
• Logistics and Transportation (Downstream) — Converts mixed NGLs into products and provides NGL transportation, storage, fractionation, terminaling, marketing and LPG export services. Set record NGL transportation, fractionation and LPG export volumes in the second quarter of 2026, and benefited from higher marketing margin and the start-up of the 150 MBbl/d Train 11 fractionator early in that quarter.
• Permian processing plant additions — New 275 MMcf/d cryogenic plants drive volume growth. Bull Moose (Q1 2025), Pembrook II (Q3 2025), Bull Moose II (Q4 2025), Falcon II (Q1 2026), East Pembrook (late Q1 2026) and East Driver (late Q2 2026) are operating; Copperhead, Yeti, Yeti II, Roadrunner III and Copperhead II are scheduled from Q1 2027 through Q1 2028.
• NGL pipeline and fractionation expansions — Delaware Express intra-Delaware NGL pipeline expansion and Train 11 began operations in the second quarter of 2026. Trains 12 and 13 are expected in Q1 2027 and Q1 2028, and the approximately 500-mile Speedway NGL Pipeline (initial capacity about 500 MBbl/d, expandable to 1,000 MBbl/d) is expected to begin operations in the third quarter of 2027.

Recent performance

Second quarter 2026 net income attributable to Targa was $765 million, compared to $629 million in the second quarter of 2025. Adjusted EBITDA was a record $1,603 million, up 38% year-over-year and 14% sequentially. Quarterly revenue was $4.44B at June 30, 2026, versus $4.09B at March 31, 2026, $4.06B at December 31, 2025 and $4.15B at September 30, 2025. The company declared a quarterly dividend of $1.25 per share (an annualized $5.00), 25% above the second quarter 2025 dividend, and repurchased 308,102 shares at a weighted average of $259.93 for $80 million. Full-year 2025 results included revenue of $17.03B, net income of $1.92B, diluted EPS of $8.49 and operating cash flow of $3.92B.

Strategy

Targa is adding Permian natural gas processing capacity and downstream NGL infrastructure to serve increasing producer volumes. It is expanding fractionation at Mont Belvieu with Trains 11 through 13 and building the Speedway NGL pipeline to connect Permian supplies to its Mont Belvieu fractionation and storage complex. In February 2026 it announced it was ordering long-lead items for additional potential Permian processing plants, and in February 2025 it announced an LPG export capacity expansion. Management continues to estimate 2026 net growth capital expenditures of approximately $4.5 billion and returns cash through a growing dividend and share repurchases.

Risks

• Commodity price volatility — Natural gas, NGL and crude oil price swings affect producer drilling and supply to Targa's systems, and under percent-of-proceeds contracts cash flows fall with price declines absent hedges. Second quarter 2026 Permian inlet growth was partly offset by lower natural gas prices and temporary producer curtailments tied to negative Waha prices.
• Leverage and debt load — As of June 30, 2026, Targa had total consolidated debt of $19,578 million against total assets of $28.52B and shareholder equity of $3.66B, including $17,900 million of senior unsecured notes, $600 million of commercial paper, $451 million under the securitization facility and $794 million of finance lease liabilities.
• Project execution and timing — Growth depends on large Permian processing, fractionation and pipeline projects being completed on schedule; Copperhead, Yeti, Yeti II, Roadrunner III, Copperhead II, Train 12, Train 13 and Speedway are all scheduled for future periods and could be delayed or cost more than planned.
• Customer concentration and producer activity — Targa's throughput depends on producers' drilling, completion and investment decisions, and temporary curtailments by certain producer customers in response to negative Waha natural gas prices reduced second quarter 2026 volumes.

Outlook

Management estimates full year 2026 adjusted EBITDA toward the top end of a $5.7 billion to $5.9 billion range. It continues to estimate 2026 net growth capital expenditures of approximately $4.5 billion. Targa expects to complete remaining Permian processing plants, fractionation trains and the Speedway NGL pipeline between 2027 and 2028.