TRGP - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Targa Resources Corp Second Quarter 2018 Earnings Webcast and Presentation. At this time, all participants are in listen-only mode. Later we'll conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Sanjay Lad.

begin. may You

Sanjay Lad

Good XXXX Michelle. welcome the to Thank call morning for quarter earnings Targa second you, and Resources Corp.

earnings company, second at www.targaresources.com. The TRC Investors section are quarter release Web Resources the Targa second site our Corp., available or on the earnings along quarter the of with supplement presentations for Targa,

or considered that In updated has presentation are Web note and Safe investor addition, materially provision results the statements might any by covered our during Harbor XXXX include statement be Any differ made in also site. predictions of the company's expectations an forward-looking this been call should of posted Act forward-looking and the statements. from could that Securities those projected XXXX. Please actual to

factors please SEC. could to XXXX, December filings, that results and Form report SEC recent ended filed of refer the our the for reports actual differ, company's including annual XX, subsequently XX-K on cause a For year to the discussion with

call Joe Our and Financial for Matt Bob Officer. Jen Kneale, will President; Officer; Executive the Meloy, speakers Chief Chief Perkins, today be

management with over have followed Jen Pryor, members Marketing. also Bob and discuss for up and President, senior questions. today's update and McDonie, team results, and highlights will following the Pat Logistics available Joe for business Scott who begin second provide Perkins. will we quarter Joe turn a President, Gathering Bob few open We call Q&A. Processing it I call Matt by an development the then will to XXXX on now before commercial and will

Joe Bob Perkins

retired by Johnson. want and honoring to good friend to actually Roy today joining. founders morning for my you I Good Sanjay. thank and Thanks, one of Targa's begin everyone

after Our Roy. named is Permian Johnson plant

place, us not a legacy had years. our who and if example Roy's report Roy of have Roy When this exist will inspiration. even earnings vision year And our so and be effectively in finance July. those tragic it been hearts. would in this attractive better Roy he Targa to our is not perhaps focus always related remains. on in will underway. a several to heads But related external for fine retired heard, capital projects from while For lot accident his growth not always but were more our Roy's in ability began, of a have and Targa of for late bicycling was many killed capital our was enjoying you growth missed. program for to

utilization those we be topic even attractive footprint is than will will one for announced the this as the production months CapEx. XXXX. Targa prospects needs outlook our For track underway. takeaway projects complete with for strength the the major projects less increase. and them Fundamentally, than and funded to projects important XXXX we crude away. projects with infrastructure. those that need on year, program, the that our are year, our heightened profile when drive new of CapEx became year practicable domestic we announced first for the the at us thorough as into financing our conversation Many into the on next to move demand on completed view the of of of commodity underway continue export and we providing quickly more growth is continues working projects and tailwinds strengthening focus a requiring accelerate half appropriately processing pipeline services plans for prices minimum already for the growth And, and And, it shifts through few in additional additional projects additional more volumes equity having NGL execute our half the continued to coming year first the with projects this rapidly now our first asset as because of on better to future our has will year as additional of even the for and fractionation believe to as And businesses. I by

operational Our for or gain -term our through momentum half our visibility. And continues year continues of to strengthen full-year performance Targa financial disclosed previously and track has own more to the importantly, its this guidance. meet first and to longer exceed and XXXX outlook

was partners Eagle day the Raising positioning our new XXX issuance during South number additional combined program asset the Basin for which key participation ramp service per demand to joint means cubic our needs. company XXXX expected Midland the additional feet financing by XX markets an strategic and in supply Successfully second Oahu Western the than million working a and Announcing Wildcat of our continued highlights. a operations we million volume more and feet equity partnership Texas year Targa's have Joyce [ph] cubic our on interest demonstrated efforts long-term equity residue our essentially gas for common which plant per area. which all dedication offerings was Basin Sanchez at of linked customers. growing ATM recently with along successful natural our the in our support commencing the Permian with XXX,XXX systems; Basin, to quarter, our the million this enhancing XXX per startup; funded long-term $XXX pulled gas execution earlier under cubic focus further the Ford minimum Our in across expanding from to our Coast the of bringing further effectively in called Gulf plant, million Texas our include in the online feet their over strengthening acres very our pipeline will outlook gross Permian by venture day of Delaware assets to by Whistler Sanchez in plant midstream day

revolvers very extending liquidity benefit asset the continue some in likely midstream revolver and to community. the bank And TRP without equity future $X.X billion the largest increasing receive needs our needs industry business. the size yield catalog also to This of from TRC we high company funded revolver, our of sales. the any with attractive have that to support We the and highlight TRP of minimum XXXX terms, support our the for our

our into the projects over now second strategic confidence to increasing for high So, continued of And focus outlook like initiatives are support results site strong Targa. quarter. at growth financial related and discuss the by to I'll With line the execution call future; turn execution, Targa's those confidence long-term that, the from of execution level Jen project in execution, driven commercial examples. and

Jennifer Kneale

morning Good Bob. everyone. Joe Thanks,

organization Before daily would Targa have deliver significant many the discuss I the second business results, elsewhere during a quarter people and in we effort extra special our in in also to financial priorities. our like shout accounting balancing systems recent while put who field, implementation out

and their make amazing our benefit much patience would our long organization as like to and and will support I term. efforts Your also this the organizations our important attitude change we customers thank support are to appreciated. and for vendors over

was and Permian. growth, increased fractionation, period than higher over and was in the and results, time. margin continued $XXX first export gathering $XX for higher our by Targa's volume. million higher In SouthOK, second one LPG second and which XX% to processing adjusted the Sequentially Moving and around coverage adjusted million $XXX processing driven EBITDA Texas, EBITDA dividend for segment downstream the X% XXXX the increased strong higher flow in quarter. driven resulting Distributable Badlands, inlet volume same and quarter North and million volumes quarter the second was higher natural in Permian, prices, quarter cash in Badlands sequential oil commodity of gathered gas gathering operating the crude by volume our

a Plant sequentially our Permian Permian the in Midland the of Missouri with processing volumes facility from quarter X% each third Permian operating at as to for new first not by party. in volumes arrangements commercial continued sequentially SCOOP year. increased natural look increased offloaded inlet growth and in to systems and X% trend to Arkoma our this volume X% expect the of plus driven that at Inlet SouthOK were incremental growth volumes being balance the Badlands increased now we Little quarter previously XX% the gas continue first the over Second do in Delaware region. Texas we Joyce to which capacity. through and short-term Inlet increased we as from quarter addition volume, benefited over North of volumes

expenses. crude gathered $X.X gathered Fractionation barrels in In volumes operating attributable crude recent XX% offset in Galena quarter. in XXX,XXX sequentially Our seasonal At businesses quarter production our Permian the and partially seasonality $X increased sequential second oil our second which driven second fundamentals. in the was XX% increased strongest segment, the were million per second to strong quarter. predominantly months by barrels years X% logistics sequentially exports over lower by facility, day Park by marketing growth volumes operating in million and by up we was in of LGP quarter basin. marketing decrease averaged the margin quarter first the in of was the the Badlands driven volumes improved our per averaging

underlying Permian value Moving million payments in payable driven earn-out for contingent the a in the remaining million compared volume expectations $XXX $XX of the currently decrease The estimated matters. quarter is to the May finance acquisition reduction forecast to period. with related in short be XXXX. our by to the This fair consideration other payment first estimate over measurement is

revolving estimate XX% commodity hedged executed the percent gas covenant condensate, times. the to market quarter And we facility and we of times billion. The At natural end TRC $X.X of During was XX% credit for natural remained Targa's XXXX TRC volume. TRCs for liquidity hedged and of current additional unchanged the our June to condensate, of approximately lower the the $X.X facility second NGL compliance On have second of billion of the and X.X equity gas, demand at basis, bank compliance was TRP quarter, extension on million. gathering approximately ratio strong half from cost were to XX, consolidated prior demonstrating both of a able NGL, On closed position. XXXX, end that field facilities. amendment to approximately our we in X.X $XXX the XX% leverage second proceeds XX% of billion estimate on TRP for versus debt the and we of second the we hedges volumes. size XXXX, at XX% equity of of and and was $X.X processing we XX% volumes relative borrowing a The Based increased approximately facility. of quarter,

reported times. approximately ratio Our X.X consolidated debt-to-EBITDA was

a for a put we million XXX the first corp. quarter our raise business XXXX to balance CapEx estimate growth over June approximately barge is forecasted $X.X approximately billion very utilizing spend our approximately marine our about call growth DevCo liquidity been is The million million given update of a for JV and ATM CapEx $XX a The CapEx Our program growth first sale for the just year program, and to proceeds, positioned million and ATM XX. million we a unchanged current we quarter through or program. have our XX% raise have we demonstrates maintenance our May, tool our early XXXX through ATM capital our through $XXX XXXX well additional of which $XXX remains we Full the that to our are in had net funding $XX be from no seven by blackout reached with able year spend with perspective and billion raise our looking second be of of the previous balance capital million as successful other to events combination sheet capital announced forward. financing earnings project raised means On budget. useful net are a very us Related our our had total multifaceted the second months year-to-date the to of continues second of we net through and an inland in $XXX from $X ATM us access financing to quarter. announcements quarter, is

program We also some financial level into and on into the our which for operational continued our continue guidance insight to growth. provide deploy We to potential would to in business sale make provided our us creative financing of allow expectations opportunities. of capital February further and more in XXXX petroleum logistics progress terminals year-over-year supplement

increasing passing will attractive been has with XXXX projects served is quarterly investors long-term continue. in year-to-date when a outlook to incredibly performance the growth with our market, beyond and to quarter our of of are guidance proposition outlook, online XXXX, when Matt? Our and priorities in well public value because private the given of going XXXX expected operating and finance the With our update significant call focusing access strategic to business and increasing capital preference to updates coupled Matt now lower avoid CapEx we turn by to leverage demonstrated I'll come EBITDA, positioned forward. our to we growth our strong that an we are capital around provide and number each very means execution over But on close to that, believe better our a we

Matt Meloy

trend good Joyce Commercial many this expect and we came and operating and production of felt. the and everyone. the Plant continue. regions and almost Permian Thanks, is activity morning Jen, positive online our immediately increasing with to In

September is capacity would the our year when late and online. volumes been systems Inlet increases to impacted online Johnson some day the per the little on feet needed. operating have our XX in comes complex we complete is it our Versado the XX% already X%, of and had be Permian increase at be LMX cubic sequential is and million Missouri much been on by XXX Permian lands, expected scheduled Plant downtime Delaware our not our utilized Midland sequentially end bad will systems system. Plant highly Our around In expected plant in

XXXX. downstream and comes frac transect we quarter continues be it the business, when to Turning in to utilized fully the the first to of expect online tighten market

infrastructure customers early and takeaway all volume. We Permian for operations Our tightening such will Targa manage tighten this channel and monitoring begin September closely condensate splitter our late are commodities we is to October. view are for -- proactively around of crude be and volume factors. issues believe relatively in customer that robust Targa's impact based more logistical other on growth economic will takeaway the are short-term should caused mitigated rate. even by recent by be and expected growth margin growth robust well-positioned temporary constraints rate and The continued on issues of and

Prix We a and XXXX second expected Southern budget with pipeline GCX in to fully supporting on will takeaway volumes a quarter Waha time Construction fully some residue also project to seeing volume on growth that North natural are XXXX. like be are with from the moving to on acquisition that in the and the remained in double-digit mentioned and and assets be strong Oklahoma fourth continues moderation on with forecast would NGL and provide to much with side the the continues is associated a pipeline period. this associated in the and activity some needed expected operational budget on Permian, the Grand remained project point on operational quarter out well volume acquired on now decline growth estimated from continue Jen payment. from already still I the expected is relief high time beyond of which Texas very that Permian area. El our and to the earn-out Paso. still resulted the expects Construction the certainly and

the optionality. to base reliability capacity, Our needs the continues place in focus a WhiteWater per continuing Prix customers processing to of target as XXX,XXX Targa's Prix, ads across that what outlook are NGL announced, historically result of Grand the infrastructure for we frac customer CapEx our Mont accelerating beyond is largest think and the growth project processing asset across gathering getting single when to Mont service, to at day is processing with at committed and level of XXXX and footprint. about XBcf capacity. Targa, to additional for customers is high capital clearly largely investing necessary Belvieu fractionation all and projects now our about best-in-class in our beyond of Belvieu think the in already tightness demand. GCX, our volume and Blanca, capacity you When Agua provide has additional we projects barrels a Grand support

the is second with reliability our even transect enhance near full we through Belvieu Fractionation operated Belvieu system tight very online. some remain partially Mont expected flexibility. by at to capacity and to operational factoring offset XXXX undertook facilities fraction during Our de-bottlenecking quarter, coming at

We once quickly progress hand. have through additional ordering position lead-time ourselves permitting continue to long construction we our have items to fractionation move and on permits begun best on to

of us to currently provides to to the six a months customer's portion of next cash our Prix bring capture substantial this significant project of increasing also an construction towards diversifying and share growth increasing We and fix growth XXXX, our adjusted on move flow abilities are organic enhance under and XX Collectively, line number new and plants, EBITDA Grand connectivity as continue the which to to XXXX track remain petchem our site with processing to connectivity to their and well-positioned demand petrochemical including we of online within beyond. in supply. and growth fracture facilities

Looking less our We on have ahead, expansions focused to maximize will volume LPG which linked we generally direct NGL and longer value. to capital that we fractionation on opportunities, securing enhance investment significantly these around directly the systems. require and in focus on expect expansion that attractive be export which drive and incremental sources increasing term capital through additional of Prix executing projects underway expenditures Grand to incremental processing remain shareholder financing

in sheet our the Our strengthen expected coverage project underway are to significantly and and increases. near-term our EBITDA dividend is balance as as completed

outlook We are Targa very for excited and its about shareholders. the

open line please Operator, questions that for with So the

Operator

first Our from TJ question Instructions] RBC. of comes [Operator Schultz

now open. is line Your

Joe Bob Perkins

morning, Good TJ.

TJ Schultz

good Hi, morning. thanks. Hi,

maybe expansions forward prepare the for extension? are about as lead just I all, there on takeaway, think time surprising as not change there, that your the to in potential moving the volume you just Prix moderation just any Grand with view the is longer still Permian, some discussed given on activity, first think to Permian with by at XXXX items and you you

Joe Bob Perkins

to moderation want The and in growing to be a clear. growth Processing, very production okay, we're rate, Grand volumes production growing our through to moderation It's moderation Prix. very volume. active not Grand a Gathering I in soon there, a is Prix, area, third-party from

project announced our monitoring know that basin success there anything our different Grand in been in Prix. if initially better. outlook I asked this for we was the And When and an You who's everybody we significantly outlook. think are

expensive. Grand of long to of project that fractional We for have include all small on necessarily. time the The of pumps been are projects, purchase Prix items not a would and pumps for lead and expand installation lead-time is our Grand addition Prix. ordering long important when items The that

TJ Schultz

Okay, Delaware you understood. what and the that would into continued in catch XQ, you volumes downtime back was mentioned, planned in On would or you was Versado XQ and of that expect kind just expect XQ? up just

Joe Bob Perkins

that sequential growth, been as so would've X%. was, it mentioned, we the X%, had Yes, we

on XX million So the day, was which the is on quarter Versado about for a average system. impacted

not impact So would in we expect that QX.

area, it's kind happening or out bit seeing that high is for for Versado single frankly slower digits. than a the beginning strong the year. the right, little just It's longer-term kind up there. into We're Our acquisition anywhere very the of outlook whether in growth just Delaware the the estimates said at even we've of our

TJ Schultz

thanks. Okay,

the just flexibility pre-funding financing, and into for you that ATM? expectation on the Just for financing tap again, XXXX you some you Do year? maybe expand closing on the private already? have Can ATM you the this on lastly asset just it's sales to of capital prefer whether XXXX, on the have satisfied

Joe Bob Perkins

answer rate Jen wanted actually to growth that, double-digit I over just it's growth it single rate. to a digits the turn high acquisition, I high I said for crack. before TJ,

to I -- So wanted I just correct want that.

Jen? Okay,

TJ Schultz

it, thanks. Got

Jennifer Kneale

number it we've to That's last a to year, really should we've when continue hard consistent very pleased that manage a think to XXXX, tapping we'll expect going the that's sheet proactively you I raise I I since the of approach forward. XXXX. we utilizing success maintain think had flexibility consistent with capital. that the forward, really going of over to our our look what through think balance been very And forward, plus. get to thus actions funding we're number worked our record, continue with to with and a messaging think track going tools far, that's year-to-date, approach. And multifaceted I how different We're

TJ Schultz

in to done still on just asset is try year. there the there sales, process to this the place get that Okay,

Joe Bob Perkins

I called it likely.

Jennifer Kneale

absolutely. Yes,

we evaluating that So Sound sale and we announced Channelview the of Baltimore our are Terminal.

of the are to we through there's for the interest proceed assets. And so market from And lot been a continuing process. those

transaction. that in the assets Our to more one more buyer than to are expectation one is likely go than

it'll just a work so all little bit time And us through that. of to take of

TJ Schultz

everybody. you thank Okay,

Joe Bob Perkins

Okay, thanks, TJ.

Operator

next of Our Jeremy from JPMorgan. Tonet question comes

Your line open. is

Joe Bob Perkins

morning, Jeremy. Good

Jeremy Tonet

here, it's far you know Whistler start want there's was innings But only just and kind Project to I curious. proportionate still much share. ownership as Just so the of off can early I here in as what that portfolio growth of would committing? kind would how kind you how think longer-term? Is about you into project, of you'd this of link like to to be this your of fit that levels volumes

Joe Bob Perkins

Yes, I specific good given think so for general. pipeline. to it it commitment related the the a equity MVC is about in about thinking way the generally But think equity we haven't to ownership percentages

Jeremy Tonet

that. influencing thanks takeaway the basin? comments from up wondering with FT kind Wildcat kind guys of you able Permian constraints? you the ramp In good that guess, kind Do you place Matt, ramps of your feel your see with Waha off you for And or How see, all the the where Permian to guys the ramp. there just of about and I Delaware on there, building do being have locked with other the there molecules was of Great, plants. then,

Joe Bob Perkins

Delaware, are Midland, bit can depending producers portfolio each There's production. activity there's whether be a as that. of residue, the that and ramp, Yes, producer volume little really differently. and the constraints options takeaway on said the as evaluating different constraints, and their have oil, NGL, a of it's on got we've and different of producers, a diverse in different I'd different every kind far one set say there's lot

said going say, going have some Permian somewhere instead some our add that in or growth adding the to rig margin basis, of there's we the here other are seen else. going of a We to We rate. as impacts, to those the think to Are footprint we're impacts? a be Bakken be going good the in in seen have But to we that. there think have some to maybe We producers script. be on

in still it kind do much strong see we out just impacted. going time that producer. as growth that's XXXX into so work and are. to something by that It's will and So 'XX. how rate to will vary And have of be And growth we're we go through

Jeremy Tonet

you've of the spend. That's And like helpful, -- a 'XX. finance as given I kind CapEx the is here. Targa down watermark stepping you And here. first-half spend wanted It the like thanks. of trend far the this just XXXX else little just to is a but first-half Jen, the And there? little bit know would as high touch just bit here, wondering the CapEx 'XX a very pig this you guidance as down then, that the in a far kind little like projects looks of has portfolio back-half 'XX as anything to python, is of of versus clearly attractive or is share yet, the bit like But not of can deep growth expect

Jennifer Kneale

Sure, Jeremy.

have I if you pig that so I'm think the in we've… heard from sure before, say got Bob python, I him. But Joe the So I think

Joe Bob Perkins

that. understand doesn't -- people said She

Jennifer Kneale

Look, year-to-date. spent billion really. we've perspective over think a I our dollars little from a Canadians, said I

Prix pace of continue, that particularly projects the come that as you when I that Grand in will expect can think early and as timing others. online 'XX, such you think about

finance I joint expect some that continue equity, the with I'd steps with capital, think from obviously with a that funding outlook XXXX, either long-term the important perspective, some forward And obviously think and business. that's the to strategic think will about what projects EBITDA sort really, this approach from that multifaceted next or us we look already gives year. from of our online public we increasing we've our private benefit confidence, when year forward number of ventures. And I taken as when to going are coming we'll the

Jeremy Tonet

taking my for you Thank helpful. That's questions.

Joe Bob Perkins

thanks, Jeremy. Okay,

Operator

question of Pickering, next Tudor, Colton comes Our from Holt. Bean

Your line is open.

Colton Bean

morning. Good

like expected driving gears of had QX. than to little bit we on little Can looks seasonality of had switching just sustainability that, results? a a bit strong in here couple quarters and here, just and we've those you marketing, context lower maybe it So actually would've NGL provide what's the the a of

Joe Bob Perkins

pieces Yes, business, guess there. mean business. our again we smaller propane have for there's wholesale couple is a I I of which of the a part

So continued fractionation side the last you And our and relatively I'd to just business. actually exports export regular margin. saw seeing our you business. in though exports, been to uplift provided LPG have in And QX some compared that pressure fractionation in it year, volumes just down strength uptick we in even NGL strong saw there's was sequentially in an seasonality. But we're was QX, pretty strength for the say overall QX what on through volumes, system some downward our

Colton Bean

be And guys look or debt financing. out you after to maybe the then so here. Jen pay project it. intent likelihood Would In that of Whistler, distributions burden? just Got to the mentioned would to for the cash reduce interest release question load retain you covering to a the

Jennifer Kneale

project, I contracts a Whistler mean I our nature just think it's for that given very associated project candidate of from as the attractive the a with meaning perspective it, financing.

been that our I for. as to we to consider ramps, what we we in going with think point think that being looking leverage. our logical forward saying to to getting project that cash is flow, why our do EBITDA consistently flow increase forward. us have cash we are very as we're and able going to about additional what reduce But moves to option that that's think think coverage, little directly premature we goal that really additional a we're to for the point is When use So

Colton Bean

so a a guess disclosure you I maybe bit on strategy. hedging terms of little and the just here, from last Okay, me in what limited do can one around guys

concentrated, Looking are have of from do average QX in and swaps. a of a you of Permian have Coast maybe given step across on Is year? that Gulf kind down the and you Express, little bit is that or rateable numbers FD the guys at Basis the daily QX next through of Waha any terms year those

Joe Bob Perkins

We that overall part year. longer-term of consistent said we're particular account, into also taking are previous with annual the associated the account taking haven't basis they with that across timing how were timing our as that very rateable that into of managing managing we We are GCX our the guidance likely we view approach, and provide exposure.

Colton Bean

I Understood, appreciate time morning. this

Jennifer Kneale

Thanks, Colton.

Joe Bob Perkins

Okay, thanks.

Operator

Gershuni comes question next Shneur UBS. of from Our

open. is line Your

Joe Bob Perkins

Good morning.

Shneur Gershuni

Good morning.

far, are you bit announced maybe the step overall NGL fully doesn't even capacity, had there Charles kind steer the already pre-come utilize Targa I opportunities about can facilities? surge of you fracs us on seeing what and bit about spot fully your to export include need picture, outlined, that a talked for in frame know tight do believe capacity or in LPG your LPG Lake beyond originally expand look back some remarks impacts prepared for I the production, you more for frac you I start-off, thoughts LPG little is there capacity, to what we're export Just that are like little mean bigger there and does Belvieu guidance volumes export at online you thus side, the expanded its away you from capacity but to

Scott Pryor

you tackle from foremost you here. Delaware that you get and But This about the is side in Midland growth some colleagues put lot list overall and both think that alluded the as that Permian look happening that as it today. obviously laundry out of help to my when marketplace to the into third-party what's we in very the is tightness first there I'll tightness NGL and try filling Scott. to fractionation Belvieu to comments the relative plants the that's there, out and and feeding evident as our relates is capacity our so activity in around a today, capacity the picture well fractionation that of up

at we of long with this in to to really are pursuing in XXXX related online front ethane moved as items those through a tight for those today advent some multiple point we that projects that's XXXX. of together that's of Belvieu the well. as said our quickly of From be on we be expansion purchased, Some will that possible the that and we all growth, fractionators once which about as recovery first earlier execute that to be have and quarter a permits the is announcement and in obviously we going bring end perspective, notes lead hand online related as X to indicated obviously we've our of of will has Targa new Train the where tried actively capacity to to

capacity Mount great great So the industry towards moving picture and export a all all at steered be both would significant look and where our is it for point. you then some we us, picture of capacity, and a when of Belvieu that at storage it's really fractionation limit certainly for that towards a footprint got we feel

We also increasing earlier have announcing relative around been projects capabilities in exporting where our our increasing ahead capacity to quarters were butanes. particularly on we

at as a and continue on to our dock we've for market of enhance as that redoing look we expenditures basically point, the capacity that capability, to At at export our much to what that pipelines that a rebuilding make will to project, be four do much surpasses. that certainly spend ways a on to from large our look is when smaller demand Belvieu will than capital flexibility. the side enhance Greenfield or there continue is of sure we small level capacity for entering projects our so say to facility maintain projects docks to So all got full well increasing wells capacity

Shneur Gershuni

in results given than Thank than $X to target give are on you XXXX, the that color, you you that the billion if was around of same could given expected last today's us you maybe I terms confident your a all bit potentially you're that as overall hit mentioned XXXX, think outlook how and in wondering target earlier seeing potentially just hitting through some call outlook that that? can color gears things, you more the your earlier had overall little for switching

Scott Pryor

in I of of what components that's Super talking and likely of components question, was we I XXXX and all developed understand term the hope you long-range to at helpful them coming that to commercialized outlook it new in we that May about tell number it projects. and less to in new of a I in got of components those try without whole feel which since confident we confident and that you down curve giving I'm that. describe it. announced, than likely due lot that yes yes high about were A a higher, So now and year views created is time than clear the how disclose. high some they today very should I'm curve that better in that probably what are going when was for into confidence so ago, translate I've earlier short we've all announcement, oh confidence

Shneur Gershuni

one a the the it Jen Yes, before sale and project give that? you the it is of appreciate another online funding able as sale, color around need does to definitely for for and this with is if wondering little of up potential coming come to helpful just question splitter just terms question can pacifically us in you're final market sort I bit of for

Jennifer Kneale

one through balance so the of of us may to value feedback done sound the have turmoil. crude asset I you sale order see we channel condensate so said sort well Baltimore, asset as of that terminal as that the our but then obviously prefer largest up It in work terminals importantly and when and to and we occurred are you we maximize of and smallest. about the is Baltimore from our then the fully buyers splitter some that things of all we think contribution have in think, of said we as of three obviously margin terminals splitter down sort and op the that's and we in Well, the for discrete directionally from evaluation also that operational condensate that that really they sort Washington worth evaluating to thing we're the sales what the terminals, so were remind particular we splitter

Shneur Gershuni

XQ comment before XQ they up In your I late think early you start when start this? said that to it

Jennifer Kneale

September of right and early October. That's said that sort late

Shneur Gershuni

you thank guys. the very color much. Perfect, all Appreciate

Matt Meloy

Thanks.

Joe Bob Perkins

Good, thanks.

Operator

comes Horowitz question of next Darren Raymond James. Our from

open. line Your is

Darren Horowitz

half prepared in about the into recoveries regional increased the expectation is you improved $X drives and on commentary the from or moving guys end composite still for lead about in that minus ethane do NGL we back a think I'm year I could big But or continue talked margin seen this ethane plus in could talked how a just know, side, space of wondering your from much potential that benefit more with ethane in expert few you for dual that you've of year. should the of million. Matt obviously economics perspective, nickel the mean? I previously the you specifically what capture

Joe Bob Perkins

kind the given like. haven't say what metrics what mid once generally generally to from the Grand ethane prices more for and We numbers benefit the online we're with for any just generally Yes, is and we given so capture more up recovery any, benefit side our us. then. of GMP higher the enhanced for benefit to haven't of able facilities, through have us the more will more for even comes we are transportation so would next prix us. would can beneficial year then relates hard EBITDA that we but to hard that fractionation it picks business for look I ethane recovery, benefit both volumes Will fractionation in as from positive recoveries seen

Darren Horowitz

your scale there proposal in the of projects do across timeline effectively with the how over and area, lot your pipes of example switching think both the Permian and gets guess then the Permian taken about there. of into point and for residue like achieve I the out project around was to for a commitments the Whistler and versus on moving those a you converging marketed? the -- potential then To comments what competing and highway could Okay

Scott Pryor

projects This I back a is question many mean competing there's you Scott. or think projects XX the half obviously two XX and as as over announced. fair last and if year

commitment I they've a to got project both kind alluded do I a pipe. getting got of to do project Matt a a for I equity the or left mortgage that. metric on as been an them done Certainly for can't of but get aside done we, the kind of our don't project. answer know position have one has do As volume valid recipe what a in certainly formula really

we their participate honestly in that place the the lot having done. they the it have very midstream, tuned initiates and both for all industry good into marketplace we and terminates it We a forecast in feel really sort players done, and we from we lot we it the experience the good we commitments have feeding so in in conversations get a where growth LNG of of about incrementally to business got project, is we like are expect markets to the Mexico growing it where like can and and get stay of do

Darren Horowitz

Thank you.

Matt Meloy

Darren. thanks Okay,

Operator

Richardson of question SunTrust. next from comes Our Tristan

is open. line Your

Tristan Richardson

Hi, good guys. morning

Joe Bob Perkins

morning. Good

Tristan Richardson

and down, and for fractionation on opportunities capacity Just can de-bottlenecking Prix? of or add Grand fractionation added mentioned have Scott side we the mentioned opportunities a side and wait while what activities you up those looking could you sort on talk those about

Scott Pryor

our volume obviously What that it's look to a give a and we was without I we operating performing bubbles in improve the are make these our a downstream going times on would want a facilities already that into degree we attractive is player that think continue that, to player run we said, the attractive you our to for as of across customers tell that or that of number reliability a at start have ways that your long for is the and you customers you are in become are sustainability lot marketplace volumes projects are that what any as a highest fractions to for say today. looks I sure as operation system up variety ramping I'm we we like, look the ensure result of outlook would very to With that not be on side. going what to focus you of and

Joe Bob Perkins

the want to team. I hat Tristan, chip my to

that to big investment it getting that utilized that high of and the for was prior beam work at utilize. in to to completely time completely and This for opportunities future bang being prepare done was buck the First of a executed. those right for be all, near cycle zone well looking very having

Tristan Richardson

ahead guys add, And incremental the Whistler just and processing would guys. side, with opportunities That's for how any with what expansion idea Whistler? time some you given of to additions helpful. day would then, there generally what my capacity be about additions forward talk opportunity to given to you frac tight we expecting Thank or be you, to the are capacity be of Whistler opportunities on those are on frac pull

Joe Bob Perkins

self-explanatory further investment growth are adding as business you and but there more or Yes, are export additional we as areas there adding takeaway when for NGL list think our in plant from of those for coming inlet of downstream production To necessitate that that's bit from part the about gas supply owners GMP our GMP Whistler and is then further processing growing, then going driver as expansion. the think kind fractionation be a volumes we many downstream, are which processing I Whistler. we think we on volumes would to equity different know, you is additional potential in the are from residue plants pipe, that also

startup of that So I Grand processing think more better the in GMP about of the the even kind Prix decoupled from and and fees. adding to side plants

Scott Pryor

Yes, exactly.

Tristan Richardson

Thank helpful. very you much. Okay, guys

Scott Pryor

Okay, thanks.

Operator

Phillips Matthew from comes Guggenheim. question of next Our

Your line is open.

Matthew Phillips

this have versus revenues -- of should a more forward? we look I to fee-based how frac just I at side mean trend down this want but there quarter and the is to sales volumes in going of here that past a terms being up fractionation bit have allocated commodity on to the pure touch continued mean, tick guys. morning Good in I come arrangement. how

Joe Bob Perkins

we basically that so OpEx which does like that hit as about think impact then fractionation it's is fee a about we about that. piece dropping business, prices OpEx, fractionation business revenue things There is impact when we fixed a and think revenues Yes, pass-through talk the business. and gas can our and of a our the it's which

margin revenues, you on tend to going revenues basis. noise that in growth much our not some there on margin operating really can -- we to an think more really is too do So and be focus bit on a

Matthew Phillips

volumes I this to this, mean, I you mean and it. pick is is getting a fee mean, more if seasonal does imply are just services, fractionation different? I go that or Got right, so to have Sorry sensitivity, for going ahead.

Joe Bob Perkins

the business is you we XXX% see a fee de-dock can walk fee don't in more. and you based It bit a of without expense that the in but little revenue the through a

Jennifer Kneale

different the there and you noise is is help Sanjay some Matt, walk through. because but from in through getting I your components Jen, this there Yes are you I where number I can think think you we can

Matthew Phillips

balance then Okay, guys on would in further here And other year-over-year, just pretty upside Mid-term in do things, the more of you moving Bakken for outlook step-up that see the works. huge side volumes to you trend and given it's Permian are with here basins, JV us? folks see growth the of moderation

Joe Bob Perkins

I'd our so We've increase, volumes the out fast processing capacity say outlook is up we by filling come really about us there online North we seen Yes, improve that by LN-X need additional go enough, good the in others, up we're expectations just place, plant continues Dakota. not feel think time. our really for just there put I in facility to through as working that so but to for

there and I'd is outlook say So out the better. good even getting

Matthew Phillips

Okay, thank you.

Joe Bob Perkins

thanks. Okay,

Operator

comes Shere question Brothers. from Craig next Tuohy Our of

open. is line Your

Joe Bob Perkins

Craig. morning, Good

Craig Shere

outlook… financial Your

Joe Bob Perkins

two heard only we Craig, words.

Jennifer Kneale

outlook. Yes, we only heard financial

Craig Shere

this is better? sorry, I'm

Jennifer Kneale

Yes.

Joe Bob Perkins

hear Yes, we you can now.

Craig Shere

is is and Okay, of add-ons on one one page. be going and you're two second jumped it's year looking out me, all you issued not slide other announcements long-term the obviously main to the over things on part those there outlook couple the able right chart that since of your at fit X, to financial

could I other quarter little every fourth close my question is your you want refreshing and the you So and not call to invest keep by cards but update appreciate to a quarter this? see

Jennifer Kneale

was we pieces the that the one the is the $X.XX the off out period, really me when a develop the, is page. that's through key of flat hope say guidance is other period which and of $XX forecast flat footnote you I also component before environment NGLs through to do of sort this jumps it forecast based in on so embedded crude that Well, jumps piece that

been move that from plus through just our as get then balance these the projects attractive that for when we've more perspective and to see opportunities The execute, long-term XX to we're this and XXXX so of Prix. through really projects are year, online to contribute. balance about now think the like talking outlook period about we impact more of start We think months to there I a accretive projects our we move Grand need key going to and that you'll them incremental in where we results. in such and need really

time obviously from projects a like lot commercial a would to directional you has understand be associated well we a that has since our that already think and as volume you on per will point then in our real I more us and that commodity go improved made any color, barrel environment need obviously investors a this success give that improved font we of in the projections do smaller perspective we like tried rightly that begins out but next is $XX follow to to prices for a around. then since we and we've we the had certainly if add crude flat with lot updating It feel then. then

Craig Shere

that the and couple useful. and didn't just the and may the you're might from that commodity be enough then side long-term next fair street a it's contracted correct absolutely you that this out include help little seems within benefits the Okay, quarters was be outlook out conservative export unrealistically you planning the and Jen anything also of guys LPG still fact

Joe Bob Perkins

outlook long to who folks year. Jen's Street be going in to outlook of trying then less actual of information, five not will add view the occurring term pointing part of more out with the start keep look to very to index a quarter and projects we're out that one than try information many soon, Understood, calling hard create beyond We an it is outlook and in to for also that worked years. want important

of advice redoing in up I next hear reprinting the does and it hear we'll provide why or line Here and we're be curve heart shorter above should next completely to I information want would likely reprinting quarter. try we becoming that unlikely on be you we to probably to another we question to the here to we and improved will people it and and quarter, was sight take your okay, answered take confidence that you this that compact think got Shneur, chart started mean question it does. was believe and because that it's that what times way do that shorter asked that heart, several the the But question see answered earlier as by curve we be chart we've term the this it's the it which

Craig Shere

Dcf? on of kind that question trillion logistics how that's having the a the just successful capital of funding, more sales, do you and as see downpayment half funding the are more much XXXX about on downstream Great, retain to and you huge obviously of with a beyond one quick think you CapEx with power increases that Jen first degree spend asset declines

Jennifer Kneale

I really our we think funding from fungibles. as perspective, view

beyond. to the in that isn't to sort think a and of can we then sand there XXXX look So line we XXXX ex-date it want we or by begin complete to forward financing

as we'll potential available our so think multi-faceted of sale I in financing business that have will balance continue using the remains I program before tools forward. of is approach, equity balance utilize track may historically or tool we terminals of a result our we're that may piece think willingness we've and what we've what important trying move do just flexibility us. time a I sheet through our to ramp that's record that everything with different fund think EBITDA to flexibility, demonstrated that view much maintain us to worked the with sheet our the continue an to and very CapEx see looking think the as I our and but we is to for we hard not But think we can I as particularly

Craig Shere

thank Understood, you.

Operator

question Sibal comes from Seaport. with next Our Sunil

open. Your line is

Sunil Sibal

congratulations morning on guys great quarter. a good and Hi,

Joe Bob Perkins

Thanks.

Sunil Sibal

remainder strong Yes, assume that first or couple seems there like wondering of to is in ramp-up just questions those going volumes there gathered could volumes, timing of any sequential from pick-up I'm can for of that is what in the we is the kind year? me Permian the food issues

Jennifer Kneale

to they from new commercial is I our activity think business mean team quarter-over-quarter a such continue XX% increased of whether obviously I to the our will business so that executed our is there and starting us so contracts, to see relatively from very small progress at you're we that obviously we're expect provide guidance Permian in for up on you'll it business continues volumes a not piece crude small to a continue continues. as going through and attractive with that we but our number very for acquisitions base, and make business nice the Permian of acquired

Sunil Sibal

fairly impact was on space the And got you some a considering pressures got it. to capital see in I wondering midstream robust that some it about starting was talked also. steel tariff competitors of have then of Okay, the that program

Joe Bob Perkins

current ordered that's don't those for items. capital project so are was drawing impact impact we our or earning already an that have pipe budget on for capital board budget so the our Yes, and material done,

component see or material relatively in infrastructure a new processing overall impact processing the steel for of cost the facilities, the small actual forward we plans, are tariffs. from facility, plan fraction any Going feel whether don't it's new causes so

Matt Meloy

that contracts that is that And I is to XX% publicly the plant précised XX% fees to out the impact of some new we see not most steel is year or be notionally the in target new purchase impacts XX% within and cost that single two other say may of XX% how not and forward. you of manageable there probably increase saw were get digit average and prices can but steel access this our our is in call the by XX% plan XX% cost to it that's is and to numbers XX% someone any as plant an there go out at XX% steel steel steel going on but deals to

Sunil Sibal

a Thanks it. had. got guys. lot all That's Okay, I

Jennifer Kneale

Thanks.

Joe Bob Perkins

Okay, thanks.

Operator

over back There like remarks. I'd further Lad any further for are the to questions. turn no call to Sanjay

Sanjay Lad

Targa on your everyone this available will we Thanks in great a for any and Thanks day. you and I interest Resources. be morning's and for may have participating call Jen follow-up appreciate questions have.

Operator

program, conference. you This may and have Everyone participating in thank a gentlemen, does great conclude day. you the all disconnect. and today's Ladies for

Targa Resources (TRGP) 9 Aug 182018 Q2 Earnings call transcript