NGL Transportation

Our primary pipeline asset is Grand Prix, which connects our gathering and processing positions throughout the Permian Basin, North Texas, and Southern Oklahoma (as well as third-party positions) to our fractionation and storage complex in the NGL market hub at Mont Belvieu, Texas. Grand Prix transports NGLs from the Permian Basin on a 24-inch diameter pipeline with capacity of 550 MBbl/d, and from North Texas and South and Central Oklahoma via a pipeline of varying capacity, which both connect to a 30-inch diameter segment into Mont Belvieu, which is expandable to 950 MBbl/d.

We are constructing the Daytona NGL Pipeline as an addition to Grand Prix. The pipeline will transport NGLs from the Permian Basin and connect to the 30-inch diameter segment of Grand Prix in North Texas, where volumes will be transported to our fractionation and storage complex in the NGL market hub at Mont Belvieu, Texas. The Daytona NGL Pipeline is expected to be in service by the end of 2024.

Through our 50% ownership interest in Cayenne Pipeline, LLC (“Cayenne”), we operate the Cayenne pipeline, which transports mixed NGLs from VESCO in Venice, Louisiana, to an interconnection with a third-party NGL pipeline in Toca, Louisiana.

Fractionation

After being extracted in the field, mixed NGLs are typically transported to a centralized facility for fractionation where the mixed NGLs are separated into discrete NGL products: ethane, ethane-propane mix, propane, normal butane, iso-butane and natural gasoline.

Contracts for our NGL fractionation services are fee-based arrangements. These fees are subject to adjustment for changes in certain fractionation expenses, including energy costs. The operating results of our NGL fractionation business are dependent upon the volume of mixed NGLs fractionated, the level of fractionation fees charged and product gains/losses from fractionation.

At our Mont Belvieu operated facility, we have nine fractionation trains, representing an aggregate capacity of 963 MBbl/d, including: five fractionation trains with an aggregate capacity of 493 MBbl/d that are part of our 88%-owned Cedar Bayou Fractionators, Train 6, a 110 MBbl/d fractionation train, which is wholly-owned by Targa, Train 7, a 120 MBbl/d fractionation train, a joint venture between Targa and the Williams Companies, Inc., in which Targa owns an 80% equity interest, and Train 8, a 120 MBbl/d fractionation train which is wholly-owned by Targa. To handle continued supply growth anticipated from Targa’s Permian G&P systems and third parties, Targa is constructing two new 120 MBbl/d fractionation trains, Train 9 and Train 10, which are expected to begin operations in the second quarter of 2024 and first quarter of 2025, respectively. Our fractionation trains are fully integrated with our existing Gulf Coast NGL storage, terminaling and delivery infrastructure, which includes an extensive network of connections to key petrochemical and industrial customers as well as our LPG export terminal at Galena Park on the Houston Ship Channel.

We additionally have a wholly-owned and operated fractionation facility in Lake Charles, Louisiana, representing a gross capacity of 55 MBbl/d.

In addition to our operated facilities, we hold an equity investment in, Gulf Coast Fractionators LP (“GCF”), GCF, also located at Mont Belvieu. In January 2021, the GCF facility was temporarily idled, but is available for reactivation, subject to prevailing market conditions and agreement with our partners. We assumed operatorship of GCF in the first half of 2021. In January 2023, we reached an agreement with our partners to reactivate GCF. The facility is expected to be operational during the first quarter of 2024.

NGL Storage and Terminaling

In general, our NGL storage assets provide warehousing of mixed NGLs, NGL products and petrochemical products in underground wells, which allows for the injection and withdrawal of such products at various times in order to meet supply and demand cycles. Similarly, our terminaling operations provide the inbound/outbound logistics and warehousing of mixed NGLs, NGL products and petrochemical products in above-ground storage tanks. Our NGL underground storage and terminaling facilities serve single markets, such as propane, as well as multiple products and markets. For example, the Mont Belvieu and Galena Park facilities have extensive pipeline connections for mixed NGL supply and delivery of component NGLs, including Grand Prix. In addition, some of our facilities are connected to marine, rail and truck loading and unloading facilities that provide services and products to our customers. We provide long and short-term storage and terminaling services and throughput capability to third-party customers for a fee.

Across the Logistics and Transportation segment, we own 34 storage wells at our facilities with a gross NGL storage capacity of approximately 76 MMBbl and operate seven non-owned wells. The usage of these wells may be limited by brine handling capacity, which is utilized to displace NGLs from storage.

Our international export assets include our facilities at both Mont Belvieu and the Galena Park Marine Terminal near Houston, Texas, which have the capability to load propane, butanes and international grade low ethane propane. The facilities have an effective export capacity of up to 15 MMBbl per month, but given the mix of propane and butane demand, vessel size and availability of supply, and a variety of other factors, our effective working capacity is estimated to be approximately 12.5 MMBbl per month. We have an expansion underway to increase our propane loading capabilities by an incremental 1 MMbbl per month, which is expected to come online mid-2023. We have the capability to load VLGC vessels, alongside small and medium sized export vessels. We continue to experience demand growth for U.S.-based NGLs (both propane and butane) for export into international markets and are in the process of enhancing our loading capabilities.

We market our own NGL production and also purchase component NGL products from other NGL producers and marketers for resale. We also purchase product for resale in our Logistics and Transportation segment.

We generally purchase mixed NGLs at a monthly pricing index less applicable fractionation, transportation and marketing fees and resell these component products to petrochemical manufacturers, refiners and other marketing and retail companies. This is primarily a physical settlement business in which we earn margins from purchasing and selling NGL products from customers under contract. We also earn margins by purchasing and reselling NGL products in the spot and forward physical markets.

We also market natural gas available to us from the Gathering and Processing segment, purchase and resell natural gas in selected U.S. markets and manage the scheduling and logistics for these activities. Our other businesses are as follows:

• NGL Distribution and Marketing
• Wholesale Domestic Marketing
• Refinery Services
• Commercial Transportation