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Blackstone Taking Stake in Grand Prix, Targa’s Proposed Permian NGL System

Targa Resources Corp. has agreed to sell a 25% stake in a proposed natural gas liquids (NGL) system designed to connect Permian Basin volumes to Mont Belvieu on the Texas Gulf Coast, a deal that coincides with its decision to join a mega-project that would transport natural gas along a similar route.

The $1.3 billion Grand Prix NGL pipeline, which Targa launched in May, is designed to connect Permian liquids and the company's North Texas gathering system to its fractionation and storage complex at the world’s largest liquids hub at Mont Belvieu. Grand Prix is expected to be operational by mid-2019.

In an agreement announced late Thursday, Targa said it would sell the quarter stake to Blackstone Energy Partners for an undisclosed amount.

Targa and Blackstone’s EagleClaw Midstream Ventures LLC also executed a long-term raw product purchase agreement for transportation and fractionation services. EagleClaw agreed to dedicate and commit liquids associated with its gas volumes produced or processed in the Permian Delaware sub-basin.

EagleClaw is the largest privately held natural gas gathering and processing company in the Delaware, with almost 275,000 dedicated acres primarily in Reeves County, TX. Blackstone paid $2 billion for the company, which has more than 375 miles of gas gathering pipelines and 320 MMcf/d of processing capacity with another 400 MMcf/d under construction.

The Grand Prix agreements coincided with Targa’s decision to execute a letter of intent with Kinder Morgan Texas Pipeline LLC and DCP Midstream LP to join in developing the Gulf Coast Express Pipeline Project (GCX).

GCX, overseen by Kinder Morgan Inc., would carry gas from the Permian to the Gulf Coast.

As proposed, Targa would own a 25% equity stake in GCX and commit significant volumes to the proposed project, including volumes provided by Permian producer Pioneer Natural Resources Co. 

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