Overview
Targa Resources Partners LP (NYSE:NGLS) is a publicly traded Delaware limited partnership formed in October 2006 by our parent, Targa Resources Corp. (“Targa” or “TRC”), to own, operate, acquire and develop a diversified portfolio of complementary midstream energy assets. We are a leading provider of midstream natural gas and natural gas liquid (“NGL”) services in the United States and are engaged in the business of gathering, compressing, treating, processing and selling natural gas and storing, fractionating, treating, transporting, terminaling and selling NGLs, NGL products, refined petroleum products and crude oil. We operate in two primary divisions: (i) Natural Gas Gathering and Processing, consisting of two reportable segments—(a) Field Gathering and Processing and (b) Coastal Gathering and Processing; and (ii) Logistics and Marketing, consisting of two reportable segments—(a) Logistics Assets and (b) Marketing and Distribution.
Acquisitions from Targa.
From 2007 through 2010, we acquired most of our operating businesses in a series of acquisitions from Targa with an aggregate purchase price of approximately $3.1 billion. The businesses include:
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In February 2007, we acquired certain natural gas gathering, processing and treating assets in the Fort Worth Basin / Bend Arch in North Texas and their operations, collectively referred to as the “North Texas System;”
In October 2007, we acquired certain natural gas gathering, processing and treating assets in West Texas and their operations collectively referred to as “SAOU;”
In October 2007, we acquired certain natural gas gathering, processing and treating assets in Southwest Louisiana and their operations collectively referred to as “LOU;”
In September 2009, we acquired Targa’s NGL business consisting of fractionation facilities, storage and terminaling facilities, low sulfur natural gasoline treating facilities, pipeline transportation and distribution assets, propane storage, truck terminals and NGL transport assets and their operations collectively referred to as the Logistics and Marketing division or the “Downstream Business;”
In April 2010, we acquired certain natural gas gathering and processing assets along with three offshore gathering systems which serve production from the Louisiana Gulf Coast and their operations collectively referred to as the “Coastal Straddles;”
In April 2010, we acquired certain natural gas gathering and processing systems, processing plants and related assets in West Texas and their operations collectively referred to as the “Permian Business;”
In August 2010, we acquired Targa’s 63% ownership interest in Versado Gas Processors, L.L.C. which conducts a natural gas gathering and processing business in New Mexico, collectively referred to as “Versado;” and
In September 2010, we acquired Targa’s 77% ownership interest in Venice Energy Services Company, L.L.C., a joint venture that owns and operates a natural gas gathering and processing business in Louisiana consisting of a coastal straddle plant and their operations and a wholly-owned subsidiary that owns and operates an offshore gathering system and related assets (collectively, “VESCO”) that serve production from the Gulf of Mexico shelf and deepwater.
For a detailed description of these assets, please see “Our Business Operations”
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Acquisitions from Third Parties.
While our growth through 2010 was primarily driven by the implementation of a dropdown strategy, we also have a record of successful third-party acquisitions. During 2011, we closed the following three acquisitions:
On March 15, 2011, we acquired a refined petroleum products and crude oil storage and terminaling facility in Channelview, Texas on Carpenter's Bayou along the Houston Ship Channel (the "Channelview Terminal") for $29 million. The Channelview Terminal, with storage capacity of 544,000 barrels, can handle multiple grades of blend stocks, petroleum products and crude oil and has potential for expansion, as well as integration with our other logistics operations.
On September 30, 2011 we acquired refined petroleum products and crude oil storage and terminaling facilities in two separate transactions. The facility on the Hylebos Waterway in the Port of Tacoma, Washington (the “Sound Terminal”) has 758,000 barrels of capacity and handles refined petroleum products, crude oil, LPGs and biofuels, including ethanol and biodiesel. The facility on the Patapsco River in Baltimore, Maryland (the “Baltimore Terminal”) has approximately 505,000 barrels of storage capacity. Both terminals contain blending and heating capabilities, and have tanker truck and barge loading and unloading infrastructure. Total consideration for both facilities was $127.5 million plus an additional $7.5 million for estimated working capital.
We have funded all acquisitions from Targa and third parties using earnings from operations, proceeds of equity offerings, borrowings under our credit facilities and note issuances. We expect that acquisitions of third-party businesses and assets will continue to be a significant component of our growth strategy.
Organic Growth Projects.
In addition to acquiring businesses and assets from Targa and third parties, we have successfully completed both large and small organic growth projects associated with our existing assets and expect to continue to do so in the future. These projects have involved growth capital expenditures of approximately $530 million since 2007 and include the following major projects active in 2011:
Cedar Bayou Fractionator expansion project. We completed construction of 78 MBbl/d of additional fractionation capacity at our 88%-owned Cedar Bayou Fractionator (“CBF”) in Mont Belvieu, Texas at a cost of approximately $64 million. The expansion went online in the second quarter of 2011, and is supported by 10-year fee-based contracts with ONEOK Hydrocarbons, LP, Questar Gas Management Company and Majestic Energy Services, LLC that have certain guaranteed volume commitments or provisions for deficiency payments.
Cedar Bayou Fractionator expansion project. We completed construction of 78 MBbl/d of additional fractionation capacity at our 88%-owned Cedar Bayou Fractionator (“CBF”) in Mont Belvieu, Texas at a cost of approximately $64 million. The expansion went online in the second quarter of 2011, and is supported by 10-year fee-based contracts with ONEOK Hydrocarbons, LP, Questar Gas Management Company and Majestic Energy Services, LLC that have certain guaranteed volume commitments or provisions for deficiency payments.
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North Texas expansion program. During 2011, we invested approximately $40 million to expand gathering and processing capability in our North Texas assets, particularly in the oily part of the Barnett Shale. This project provided both expanded capacity in the gathering system via new pipelines and a new compressor station as well expanded residue take away from the Chico Plant. In addition, expanded CO2 treating was added due to the higher CO2 content in the gas from the oily part of the Barnett Shale.
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North Texas expansion program. During 2011, we invested approximately $40 million to expand gathering and processing capability in our North Texas assets, particularly in the oily part of the Barnett Shale. This project provided both expanded capacity in the gathering system via new pipelines and a new compressor station as well expanded residue take away from the Chico Plant. In addition, expanded CO2 treating was added due to the higher CO2 content in the gas from the oily part of the Barnett Shale.
North Texas expansion program. During 2011, we invested approximately $40 million to expand gathering and processing capability in our North Texas assets, particularly in the oily part of the Barnett Shale. This project provided both expanded capacity in the gathering system via new pipelines and a new compressor station as well expanded residue take away from the Chico Plant. In addition, expanded CO2 treating was added due to the higher CO2 content in the gas from the oily part of the Barnett Shale.
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SAOU expansion program. During 2011 we invested approximately $30 million to expand gathering and processing capability in our west Texas assets, particularly in the Wolfberry play. This expansion program also included expenditures to restart the 25 MMcf/d Conger processing plant, which went online during the second quarter of 2011.
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SAOU expansion program. During 2011 we invested approximately $30 million to expand gathering and processing capability in our west Texas assets, particularly in the Wolfberry play. This expansion program also included expenditures to restart the 25 MMcf/d Conger processing plant, which went online during the second quarter of 2011.
SAOU expansion program. During 2011 we invested approximately $30 million to expand gathering and processing capability in our west Texas assets, particularly in the Wolfberry play. This expansion program also included expenditures to restart the 25 MMcf/d Conger processing plant, which went online during the second quarter of 2011.