Targa Resources has entered into an agreement to expand its natural gas processing joint venture with MPLX in Oklahoma.
Through its existing 60/40 joint venture, Centrahoma Processing, LLC (“Centrahoma”), Targa and MPLX will construct a new 150 million cubic feet per day (“MMcf/d”) cryogenic natural gas processing plant in Hughes County, Oklahoma (the “Hickory Hills Plant”) to process growing natural gas production from the Arkoma Woodford Basin.
The Hickory Hills Plant is expected to begin operations in the fourth quarter of 2018. Targa is contributing to Centrahoma its existing 150 MMcf/d Flag City Plant (acquired in May 2017 and decommissioned shortly thereafter) and that, along with the new additional required plant infrastructure, will become the Hickory Hills Plant.
Targa will also contribute to Centrahoma its 120 MMcf/d cryogenic Tupelo Plant in Coal County, Oklahoma. In exchange for Targa’s contribution of assets to Centrahoma, Targa will maintain its 60 percent interest in the expanded joint venture and will receive a cash distribution. MPLX will contribute cash to Centrahoma to maintain its 40 percent interest in the expanded joint venture.
The Centrahoma joint venture and the recently announced joint venture to construct a new 200 MMcf/d cryogenic natural gas processing plant at Targa’s existing Little Missouri facility in the Bakken with Hess Midstream Partners, LP (NYSE:HESM) both highlight Targa’s continued focus to align with attractive strategic partners in opportunities that are capital efficient and expected to drive greater incremental volumes over time.