Targa Resources Corp. said Thursday it has signed agreements to acquire Southcross Energy Operating LLC and its subsidiaries in South Texas for $200 million in a deal that will consolidate Targa’s natural gas gathering and processing footprint.

Permian

The Southcross assets include a currently idle 200 MMcf/d natural gas processing plant, Houston-based Targa said. Through the deal, Targa will acquire fee-based contracts, “with the vast majority of volumes being low pressure wellhead gathering,” management said. 

Targa also will acquire the remaining Southcross working interests in the firms’ existing joint ventures. 

Targa is currently the operator of two JVs with Southcross called T2 LaSalle Gathering Company LLC and T2 Eagle Ford Gathering Company LLC.

T2 LaSalle and T2 Eagle Ford own about 60 miles and 120 miles of high-pressure natural gas gathering pipelines, respectively. The pipelines gather and transport gas to Targa’s Silver Oak gas processing plants.

The Southcross acquisition is expected to close in the second quarter of 2022, Targa said.

The transaction follows Targa’s sale of its 25% equity stake in the Gulf Coast Express Pipeline for $857 million.

Upon presenting its fourth-quarter and full-year 2021 earnings, Targa announced plans to build a new 275 MMcf/d cryogenic natural gas processing plant called the Midway plant. It will be located between, and connected to, Targa’s existing systems in the Permian Basin’s Delaware and Midland sub-basins, management said.

The Midway plant comes in response to “increasing production and to meet the infrastructure needs of producers,” and is slated to begin operations in the third quarter of 2023, Targa said.