Targa Resources Secures 20-Year Deal With ExxonMobil

Targa Resources Corp (TRGP) announced a major infrastructure expansion after securing long-term, fee-based agreements with ExxonMobil (XOM) across the Permian Delaware and Midland basins. The deal significantly bolsters Targa’s processing and takeaway capabilities while offering midstream investors enhanced cash-flow visibility. Targa Resources executed 20-year fee-based midstream agreements with ExxonMobil covering gas processing, gathering, and natural gas liquid (NGL) transportation in the Permian Basin. To support the deal, Targa is adding roughly 825 million cubic feet per day (MMcf/d) of processing capacity and building the 70-mile Bull Run II natural gas pipeline, both slated for the first half of 2028. The company revised its FY26 net growth capital estimate to roughly $5 billion to fund these extensive Permian infrastructure projects. The 20-year integrated agreements include new and extended acreage dedications across both the Permian Delaware and Midland basins. Beyond gathering and natural gas processing, the deal secures long-term natural gas liquids (NGL) volumes for downstream transportation and fractionation. This agreement deepens Targa’s existing partnership with ExxonMobil, one of the largest and most active producers in the Permian, by significantly expanding their footprint in the Delaware Basin. To support ExxonMobil’s volume growth, Targa is adding three new natural gas processing plants in the Delaware Basin: Wrangler, Ranger, and Ranger II. Together, these facilities will deliver approximately 825 million cubic feet per day (MMcf/d) of aggregate processing capacity, with in-service dates scheduled for the first half of 2028. Furthermore, Targa revealed plans for Bull Run II, a roughly 70-mile natural gas pipeline in the Permian Delaware intended to relieve regional congestion by expanding takeaway capacity directly to the Waha Hub by the first half of 2028. Looking further ahead, Targa is evaluating up to five additional processing facilities in the Delaware Basin and timing a new fractionation train at its Mont Belvieu complex. To fund this development pipeline, Targa raised its FY26 net growth capital projection from approximately $4.5 billion to roughly $5 billion. For midstream ETF investors, Targa’s fee-based multi-decade contract highlights the predictable, fee-based cash flows that are typical in the energy infrastructure space. Notably, the 20-year duration of this deal is on the longer end of typical producer agreements, offering strong cash flow visibility.