Targa Resources Partners LP plans to expand the capacity of its Cedar Bayou Fractionators LP (CBF) natural gas liquids (NGL) fractionation facility located in Mont Belvieu, TX, the company said Tuesday.
The maximum gross fractionation capacity of the facility is anticipated to be expanded by 28% to 275,000 b/d, an increase of 60,000 b/d. The project will increase the partnership’s maximum gross NGL fractionation capacity along the Texas and Louisiana Gulf Coast to 439,000 b/d.
The CBF expansion is expected to be supported by a long-term, firm space fractionation agreement at market-based fees with ONEOK Partners LP. CBF and ONEOK expect to finalize an agreement soon, Targa said.
“The addition of this growth project advances our objective to increase the fee-based percentage of our operating income,” said Rene Joyce, CEO of the partnership’s general partner and of Targa Resources Inc. “Our liquidity affords us financial flexibility with respect to the expansion as well as other major fee-based growth projects currently under development. We believe our expansion was chosen [by ONEOK] given the economics derived from our low-cost expansion capabilities.”
The partnership expects the expansion to be operational during the first quarter of 2011, subject to regulatory approvals, with no disruption to existing operations during the construction phase. Total capital expenditures for the expansion will be significantly lower than a greenfield fractionation facility because the new capacity will be integrated with existing fractionation capacity, utilities, infrastructure and footprint already in operation at Mont Belvieu, Targa said.
The partnership’s total capital expenditures for 2010 should be about $130 million with maintenance capital expenditures accounting for approximately 25% of the total, Targa said. The forecast includes spending required for the CBF fractionation expansion as well as other projects included in the gas gathering and processing and NGL logistics and marketing businesses. The 2010 forecast does not include growth opportunities whose timing is uncertain.
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