Targa Resources To Acquire Stakeholder Midstream

(RTTNews) - Targa Resources Corp. (TRGP), a midstream energy company, on Monday announced it has entered into a definitive agreement under which a wholly owned subsidiary will acquire Stakeholder Midstream LLC for $1.25 billion in cash.

Stakeholder Midstream provides natural gas gathering, treating and processing services, along with crude gathering and storage operations in the Permian Basin.

Stakeholder Midstream system includes approximately 480 miles of natural gas pipelines, 180 MMcf/d of cryogenic processing and sour treating capacity, carbon capture or CCUS activities generating 45Q tax credits, and a small crude oil gathering network.

The assets are supported by long-term, fee-based contracts covering roughly 170,000 dedicated acres with low-decline production, providing a stable volume profile.

The company said Stakeholders' sour gas treating and carbon capture capabilities complement its existing treating and CCUS footprint in the Permian.

The company expects the acquired business to generate about $200 million in annual unlevered adjusted free cash flow, with minimal capital requirements, low integration costs and a durable activity base.

In the pre-market trading, Targa Resources is 0.68% lesser at $174.11 on the New York Stock Exchange.