TRGP - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the Targa Resources Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Sanjay Lad, Vice President, Finance and Investor Relations. Please go ahead, sir.

Sanjay Lad

Cole. Thanks, welcome Corp. quarter and for earnings the Resources Targa to morning, XXXX second call Good

quarter release, accompany second in presentation available The earnings our the for earnings second on Targa supplement Investors quarter section. Resources at that website our are along call targaresources.com with the

Section In updated be the Resources' Targa expectations in has predictions should investor of also our within posted to XXE include addition, Statements that made Exchange statements. forward-looking differ of XXXX. might forward-looking Securities an considered meaning statements results website. Actual projected during materially presentation Act been this the call or those from of could

For please a our latest could cause of that filings. refer actual results to factors to SEC differ, discussion

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

Additionally, now the Muraro, team senior McDonie, Transportation; Gathering will and for Logistics available Commercial Scott Chief to management Officer. and President, be turn and Q&A. Pryor, call will President, over Pat Processing; Matt. Bobby the following members I

Matt Meloy

South our $XX our negotiation acquisition of subsequent Delaware assets, Series in stock, including common their thank and Thanks, Coast successful Permian, a the to all transportation and Express exciting it as sale accomplished the A colleagues Gulf I quarterly already And successful has a seven time interest and welcome of record lot. Pipeline, Texas acquisition, And volumes opportunity new of This publicly like want team busy of close to of repurchases. for would is employees Delaware financing continued integration I months completing for and our the first Targa been also volumes, second collective very to an share of Basin team. strong to our efforts Sanjay, the our of has of XXXX, preferred the recent company. redemption million our fractionation record-high the take execution given our EBITDA, our record across acquired this quarter, morning. and good Basin NGL in

priorities will ahead, within range. common common Looking dividend count, share our continuing a leverage maintaining to reduced EBITDA, increasing on drive strategic our higher target execute while

Our and we continue. strong, to has performance this expect year been that

the the $X.XX are Basin for guidance account acquisition billion. year for effective our Delaware financial completion We now full of to August the year $X.XX XXXX between to EBITDA We and billion X. updating estimate be adjusted

We beyond. of grow to remainder well across Midland our Delaware and the to expect volumes both Permian and for positions year continue the

Midland Hill plants And to We continuing line construction, are Legacy Permian IV and Midway and our across have we the the NGL I business. gas Red Permian in II growth, G&P volume several of and under invest Delaware. increasing sight in Legacy to our given

new in Investing return in shareholders. projects fractionator strong continue a returns Belvieu. and the attractive us integrated to capital which two day position in Mont footprint across provides are plant; X with day cubic the Midland, Train projects, Greenwood a and new feet calling a plant Permian announcing are per XXX We our in XXX,XXX processing to our Targa to million new puts we organic per barrel growth

a in Permian day per and complementing combined cubic billion the X.X Permian of processing to X.X per processing position Delaware about of in have Basin of Permian our Bcf Delaware, acquisition per the Basin now Midland a X.X total combined Bcf capacity. Turning we day basis, feet processing On day our capacity combined footprint. our for

have Mexico. acres and counties the and acquired increasing our of assets some Basin with as moving synergies volumes size several activity providing well expect near- the result of assets. across and economic as the Basin, of scale across Our multiple. North dedicated growth EBITDA the of decades that in will increasing We million attractive our in X.Xx and assets at volume in long-term Basin acreage Permian us reach Delaware into our Delaware reduce now XXXX estimated to We an multiple Eddy future extending by and acquisition Lea acquisition, the New productive highly the integrated most America to active overlay the

to to leverage expect come end year capture processing from X.Xx, on debt comfortably expect synergies midpoint and We our acquisition We new for up the over renewal existing downstream hand target Targa and around around ratio. as leverage with Xx and time the long-term the of cash Xx expansions. funded contracts to with

well, Legacy and Basins to day A schedule. now I online next to XXX detail. inlet operations the our to discuss systems the Permian online per is come a more Permian, month, systems plant utilized. safely to bring quarter. continue Midland Legacy to engineering reported second Mmcf record run our this later perform we full, averaging X.X of Starting expect in diligently working highly Bcf during In Let's Midland, our continue Delaware special operations our for day and the and to and our ahead bring in across which expected per thanks teams online volume

Midland of to similarly II it to be expect system plant and operations track during utilized highly XXXX, volumes Delaware, ramp. across our in are online. Permian also to it Permian the we remains begin Our In when on Legacy continuing second comes quarter

XXX a expected expected our to is new plant day million million of online operations day XXX the VI Red is Midway Hills in XXXX. plant quarter third September. a begin And new Our during

Shifting connections for VI counties our plants. gas in online, second assets an winter to across We have and acquired from XXX,XXX complex region, when crude per a to rebounded. day and quarter. during have the natural second during to but Belvieu a volumes to full sequentially the increased to Fractionation at quarter. South since near-term North the volumes per Shifting were in our Oklahoma market storms we fractionation Mont plants In drove and and be volumes Mont increasing Belvieu Hills handle our it XXX,XXX by our flexibility essentially Targa growth second Throughput day, volumes Delaware Texas Central the barrels in our comes third and impacted system record transportation gathering from and continues the activity production driven were sequential NGL and additional production to Belvieu Permian during Lea a Texas quarter, Mont segment. the Red with Logistics NGL barrels to record volumes in X% expect levels Targa's and second Badlands. Late the parties. Transportation uptick increase volumes Eddy quarter tighten. in Permian

of is X operations quarter during our parties. permitted third with of moving Train million an to cost the are from given global We In we during markets. estimated barrels our our G&P LPG month of export volatility quarter, business despite per forward commodity Train expected XX.X around systems second the continued XXXX $XXX providing begin for second services Park, customers Permian consistent and in is supply an million. average outlook a fully our and loaded Galena for growth with continued outlook X at

low-cost We million to project an our capabilities propane previously loading our capacity increase month mid-XXXX. announced continue expect to expansion to by of X barrels complete with per incremental

around at X.X million have $XXX Lastly, a of cost shares almost purchased year-to-date, million. common we

balance is Our strong. sheet

to continuing our and in business, We acquisitions. invest through organically are both

amount about outlook. we increasing an are capital Targa's shareholders, of excited returning are to We our and

priorities the to our while focus employees executing best-in-class I continuing strategic on customers. over extend for to our to services turn Before safety I you Jen, to their our on and a to Jen? would thank continued like provide call final

Jen Kneale

South our operating volumes Higher Thanks, activity and margin transportation for systems, partially commodity in operating our across levels expenses. adjusted sequentially our second to offset prices acquired Matt. higher was and EBITDA and X% inflation. primarily higher recently lower by higher attributable G&P quarter quarterly million, assets were from expenses Targa's and and as processing logistics marketing reported systems, across gathering benefited Texas the increasing $XXX.X we increasing and

fee tailwind as quarter. across higher, to are be $XXX our we from commercial free second million net generated flow Targa us businesses across adjusted a the continues costs inflation-linked benefit While of contracts. for inflation in cash escalators our

received Series the redemption our the completed approximately Coast the second all of $XXX quarter, we with Express also associated $XXX proceeds preferred of in stock sale Gulf interest of million. of During million for pipeline the our outstanding and A

we the July. $XX and of billion leverage the We about million second end net million liquidity. at consolidated $X.X repurchased quarter, of during quarter Our in available X.Xx shares of $XX ratio the common was about had additional and second an repurchased

of $XXX repurchase approximately million $XX.XX. the Since $XXX remaining an have under in program or of shares million at average shares X.X million XXXX, We of about share quarter common repurchase program. opportunistically common $XXX price our of repurchased fourth our we have million the inception

provide in of hedges XXXX expect XXXX balance $X.XX We XXXX. with are the expect pay concurrent continue year, of and with common announced early and we share hedged have to likely our dividend added to guidance. per when we the financial for a to significantly we for next Throughout dividend XXXX, operational increase to be

into We to availability for in acquisition of an very paper revolver. higher our issuer, a Pro revolver. have available notes to of billion a able been entered couple being It finance the term XXXX loan has investment-grade and our Benefiting three-year active recently than about for investment-grade a at we XXXX. we continued also under liquidity we through the were average Delaware months weighted team hedge $X.X from five-year forma issued of the commercial attractively program. now acquisition, hedges add market, senior as finance on have also our Basin a prices and combination XX-year

to financial of estimate to and acquisition and ratio from year-end are X.Xx. $X.XX XXXX mentioned, partial updating our to $X.XX Matt leverage a estimates year between for Basin billion full the be As and EBITDA account we estimate Delaware a adjusted now contribution year around billion continue

plus XXXX billion. assets, the X billion With and support be spending growth now Delaware the Basin of estimate between we XXXX spending announced today, addition $X $X.X plant and Greenwood net the Train to for CapEx newly acquired to in

Our maintenance approximately estimate $XXX unchanged for XXXX at million. CapEx remains net

underlying strength to to capital in an business investment of we by solid are Targa's Our forward the of looking position businesses, and excellent increasing supported balance continued our shareholders. means our in amount continue return sheet to fundamentals growing

for to thank to employees our like call prioritize will the safety. to for Sanjay. Lastly, I'd and turn with and And back echo continuing dedication I their that, Matt over

Sanjay Lad

Thanks, Jen. for please open Q&A? Cole, [Operator line you Instructions] the would

Operator

our from [Operator with come will today first question Tonet Instructions] JPMorgan. Jeremy And

Jeremy Tonet

the of start cash acquisition this with as And a all. to bit wanted kind flow. to thoughts lot just look and there's But available Big dive seems it wanted you like Just capital to into of spend the get I drives into 'XX, that And a time your you allocation the only year sheet It would and more capacity is thoughts when landing. increase. where buybacks Or price see is sensitive it to with think opportunity that buybacks? it for you stock? seems buybacks, balance about more like more.

Matt Meloy

to have strong as going lot Yes. and Jeremy, we this get through we're our of move a then year good flexibility a EBITDA growth with in expecting are really into in XXXX, growth business. we where position we continued as

we'll continue of But time. increase return we'll really focus a some I which that increasing really is driving to then capital XXXX to shareholders more capital good on Targa investing organically, flexibility shareholders. to and to of of returns over think ability to in have lot for our return the

right So XXX recommendation we'll buybacks. piece with then come our with equation. peers, continuing peers. will of the of That look dividend. look for XXX, one industry and also share be the is. S&P we'll look our dividend level We'll We'll a this at fall, our And at at discuss a broader kind then Board up what

here We'll flexibility set have to sense if I the just up with we look You've in would such going some makes don't seen share organic it's a program. where to be macro can and at the say ramp projects, us our to light that, even plan setting is then that that growth that that and say look level acquisition. to up Lucid it increase like I our see dividend we increasing in environment. see opportunistic that us this. still buybacks. so. our at going a been We're actually come then We've we opportunities an good but of do

Jeremy Tonet

to of kind is it dividend, as to S&P of When wanted about two the my to just or or peers to points regards thoughts I'm cash could with you marketplace out that. coming the put provide any there And kind to guess think you midstream like returned year helpful. in more concern on and whether be clarify That's I free it. flow next much relative Got M&A. XXX? just shareholders follow-up. that And this wondering there's

Matt Meloy

Yes.

dividend, I as we think the industry to we peers. will towards look look broader

$X.XX, about to We when ability we modest I and midstream continue certainly having will view by of be to a discussion in dividend flexibility modest than so we desire take then I a talked have and our M&A peers at flexibility Board. if way, our We'll it. do to talked be we kind do informed how Either organically. more to to lot a will we're going our the what growth. forward similar ability do. to the to we moved with growth. of that. business do think look to that more But That go about financial And we've our as invest prioritize We

I and think us the position we in for Lucid to the of bar going other that's to Southcross need have high coming with of both We continue out the M&A. put strong side a acquisitions. M&A a really the something

reported X.Xx ratio. We're is by estimating year-end. X.Xx leverage balance Our We sheet strong.

we've say strong with as and on this that acquisitions we those year, can synergies and going if right I'd sure a get making balance think to our do we M&A. focus to So be have we those the want integrating from acquisitions. well any extract we active sheet now those we been as make is do sure we

think business to organically going while, while even flow on to cash then increase I capital is a to we focus in little So and have invest integration return for here our significant our of shareholders. be

Operator

Our next UBS. from Brian Reynolds question will with come

Brian Reynolds

the relative kind should just exposure how Is earnings I that in we of acquisition we to recent POP evolving transportation see business was assume the little about fair over on and growth exposure? post should could a commodity logistics forward L&T to fee-based you G&P mix and the XX-XX curious if going it in bit time. of kind G&P and think Lucid

Matt Meloy

Yes, sure.

commodity Our just with but fee-based fee-based. primarily way I'd in embedded commodity exposure say, contract. is being, with Lucid contracts there really are entirely the exposure some There those it's still settled,

fee-based equal, margin all going time. increase that's marginally our So things to over

result those of we invest we integrated more then export an going and in it at And what's more to bit is our our kind a And Train result going to going of downstream, business. our needed We're just G&P. environment. volumes. G&P in we higher kind going with the To like That's up mix to handle that the prices earnings of move just shifting businesses. invest those so above -- of business. fee mix, we a excess think both As investing floors, a we're look as we extent and integrated to get it of having as be G&P then what's dock of to X ends continue to commodity into a in invest platform. the really price little and margin and It's higher we're are commodity

fee-based to our just just to to So a our businesses. to downstream margin we're increasing to from both in from We're in increase growth That we continue going invest basis going fees. absolute going have business have an for. margin G&P to we continue fee-based have We're don't target fees. on see going We're business said, to grow. continuing continue in

Jen Kneale

existing or catalyst to particularly to come elements as where to or add we'll to also to contracts some contracts. have any renegotiate already floors we there's don't those those contracts fee-based continue be for up And expiration able look

will that on cash going also help So flow additional provide forward. the stability downside

Brian Reynolds

Great. carbon appeared follow-up, all color. acquisition some Maybe GC and as waste include the that Lucid incremental to capabilities. I one my appreciate

Reduction should the for Inflation Act set processor think in included the we potential largest about opportunity increase credit XXQ recent Permian? as the given Just proposal, in how Targa

Matt Meloy

Thank Yes. you.

working as Permian something really commercialize made well. if just working carbon good Lucid there's footprint. progress Lucid, on to we can on We prior that across have been on our capture to see has

develop there really XXQ, say smart how really Midland the have do increasing yes, easier the get are in if to it and that, and you're And passed, those makes that knowledgeable Delaware I'm both excited to be They over so side. the people opportunity able the line. finish this. some about projects right, gets with to the good on And to over about I'd who

plus of it increases ability we think opportunity. I work expertise to the have their done, commercialize that So kind with that our

Operator

Wolfe next Keith And from come with question Stanley Research. our will

Keith Stanley

Can you start shifting impactful assets. to referenced I capacity Targa volumes Lucid some above just opportunities on Lucid guess more might it be? how onto long-term your it's potentially guess if talk a and term, about near-term, little I synergies. you other near

Just that and color you're any about thinking over lines how along those time.

Matt Meloy

plants. out Yes, sure. will term, NGL be processing in West on Delaware We think near the side over moving capacity we there Far but some have just synergies volumes excess to some our

We running have is excess overcapacity. Lucid capacity.

in to capability from. pipes And gas we and move more they're working so putting when the tied together. actually -- to expand already We're more to some on

move we some And liquids existing processing what Targa of near business. we that That's move down another to then call be Grand from system able So on some existing our as then plants capture undedicated. those to term, time able add We'll over we'll to off plants, to those expect processing downstream be as and pushes roll those opportunity. will be over those those as volumes time, dedications offloads on just it we NGL Prix. And into well. our

So some up. contracted and I'd say some term there where longer are it's some tied medium term or then term, short

the to So all a it's just NGLs time. It's capture ability over we we from be I going our move kind liquids have day. those our versus for us to a going one amount it about large system gradual a how to to done, coming really previous of probably will a similar cliff at or be onto that acquisitions think gradual think be increase of in

Keith Stanley

cash Company the the Great. Reduction could And can on that currently written give bill Act. just material the Inflation when just and how you to update second impact be Jen, expect with taxpayer Company? is question, a you an

Jen Kneale

and growth of we ultimately of until amount and profits what wouldn't spending from it any is material there. amount earnings pay are would assumption So depends our current capital then ramp XXXX, we on and taxes our really the But undertake. currently, Keith, any cash that that it

So shifting existing depending on again, we've it's our it, probably, then growth spending, our NOL. call And et worked XXXX be way through that could capital before cetera.

Act, With available regular But taxes tax minimum then future. be in the the reduce be Inflation XXXX. taxes -- that available a really could we would income be potentially to would those in paying Reduction

versus So it a of when would cash really taxes pay create of shift more timing else. anything we

Operator

come question Holt. from Our will Pickering next Bean & Tudor, Colton with

Colton Bean

few like Grand So here. during advance nearly reached day bundled looks Prix in barrels But I for apologize it QX. questions a XXX,XXX a

you the to So And one, Permian time Mid-Con? sort as is frame barrel new interconnect need can would that there utilization two, the lead what extent mix to capacity? that continues online, XXX,XXX plants to And upside Texas? push the line loop beyond then between of not, and day to climb to ability any XX-inch the come a North in if Permian you

Scott Pryor

West that We're have we coming leg with to where And certainly Williams Colton, say us. start competitors necessary customers to Matt comments versus those this pipeline is is that continuing Bluestem. it the of But to west described is today. will from pipeline to Conway of and the Prix roll it that roll we connection we've other Scott. that has contributor one grow volumes over that, just up the from pipeline. Northern time off that the mix that add see contributor our with and if through of the not as add. aware pumps he with that are leg it's leg some Grand contracts existing is Kingfisher I got off on some I'll pump exactly But a to of our the would and and the want we've what would with in need

on evaluating Permian. make what is the may always run whether in increasing the are relative the needs of Prix or and above that sure are It publicly. did that -- acquisition then out Permian, the to expansions XXX,XXX our do. We side, are transportation what with kind needs along plants legs, recently we processing the to our Delaware needs maybe add new gas obviously as over of volumes barrel And transportation add have our it's future the plants that goal stated limit evaluating the it's we additional goal are we to we Midland Grand those is both current whether pipeline that or we

Colton Bean

piece, expectations you need time the be just what able any larger to interconnect? of lead Maybe around line loop early Great. to last on that would to that sort

Matt Meloy

Yes.

of through that processing to lead us fair So capacity a that we now are gives are plants capture lot have to liquids to those. us. amount able going that. a working of We've be We a number underway time still significant add of got to

of when kind and is. volume time additional of of the I'd capacity right at the our right timing through working we're build in So looking transportation say now, transportation to evaluating add the kind

So of actively something that's working on. we're kind

look as just so go we that And have just at to we'll -- of of kind kind forward.

Colton Bean

balance Got material it. And step-up switching A the over the here trajectory the Q-on-Q. of then OpEx in on through G&P you're to segment. year? fairly Any just expecting the detail

Jen Kneale

Colton, is Jen. this

QX think increased to as should the acquisition. of just an a Lucid expect QX I you result relative

inflation We things businesses and cost are in like the terms across chemical seeing costs of side that. our on

that, that Delaware an of G&P then plus we both just to this costs are expectation costs Basin the I levels increase, trying And levels job continuing side well. of rest to on standalone a activity are have but good as think higher. also Targa. our as really activity teams certainly in higher manage year, doing of increase through And results

Operator

question And our will with Neal Truist next Securities. Dingmann come from

Danny Peak

Peak Danny Neal question today. expansion. first is about is This on for really in on My filling

which region coming some additional attractive any And the demand if is you and plants attracting You would say see guys Do areas online. for strongest? material you products? so, guys have

Matt Meloy

regional to is fractionation clarify, referring that... for of are products? to say just Or kind you demand, you demand Sorry, just

Danny Peak

Yes. That's correct, yes.

Matt Meloy

Okay.

market. of we see a tight said scripted comments, in the frac I kind As do

have volumes volumes Our A of have ramped. third lot ramped. volumes, competitors' parties the

a hit So wide-grade Belvieu. we're seeing lot of

coming from up. is the the some tightening of in from operational A coming Permian from it lot is that industry A with we've of also had lot growth. that well. areas so coming as other market upsets And is

of So bit. fractionation flexibility a with that's and and on causing tighten X our have up to with some some giving excess complex X Train coming kind us We capacity. still

And Lake flexibility in is. what potential have restart also at GCF are We we Charles. for right the timing looking a

sorting of that. kind through we're So

we'll So expect some provide we able Y that up, tight to a is and while. be be But outlets for I think it increased it to do grade. for tightening

Danny Peak

Great. my is on allocation. And capital Okay. last question

level more But is guys where a for Specifically, any color with be there me. give that? aggressive you would your leverage you it you at become your year-end. at stock midpoint buybacks? expecting I or That to be are can know on midpoint will by

Jen Kneale

This is Jen.

ratio to easier leverage be itself leverage it's best the target the is be towards your aggressive when lower may that end your presents not think long-term more opportunity But in trending of the range. market. I if

had you a where if our saw wouldn't back the repurchase to that go leverage to rewind XXXX, it we the shares. it wanted So be. in October we place, in say repurchase and to unique we I when program of opportunity But market we put

the we'll And it's of want of a strong important is sheet. expect so important that. capital I'd how most going that profile maintaining we with to part Company element stepped The we an how the of into forward. return balance very manage

flexibility ratio be to really we of Xx bottom sheet Xx, end opportunity to leverage the target And the that is So leverage will believe I we the be with range, be us see matter range do then long-term it that in just see presented to within of have which think market. if active. a preference is strong, balance that of to for you'll our what a continue

Operator

come question Mulvehill next our of with America. Bank will Chase And from

Chase Mulvehill

to Obviously, in first the of is adding a lot seen a of back Permian your for announcements really we've coming processing capacity. guess recently the lot Permian. question just processing I peers capacity

talk if you relative think Could to year. next kind online you bring incremental capacity of of confidence we you and X.X end by the about you you that have those b think yours, online? Would of of to plants bring filling got a day about that the about So that? I

Matt Meloy

we've starting I across mean five got we of good nearest with Sure. say the about feel now I'd plants ones, kind feel being run we Chase, yes. -- No, lot Permian. those a the right just really full. we term

Legacy going I they and both to day highly really are I be on. turn Hills the think Red utilized

on We are it full running over Lucid actually asset. Delaware in was Midland. the And absolutely the full in the

So to to of Hills full to day that's be -- the those We're is go kind Sand replacement. when I you be plant, the X. are plant. And going going Midway a partial think idling that a

So and growth then available we'll there. for over move volumes those have

to most utilized volumes Sand X. be just of the going is that Hills So from day

feel story And so Midland bring plants then same of been that in highly be utilized of We've very have kind the really pressures number us for plants leaves Midland. two plus to it's able up going optimistic those lowering come a on more Basin. as the they soon We added processing in Permian the and the growth. when And as we're we it production on from the quickly. fill very field coming flush with overall then to

Midland gives maybe cadence for more us with do to a little going Delaware of what's think looking we'll and I that. on that -- bit hopefully, there. really, the plant we're be next adding think the need with beyond when need when another the time. Legacy like Greenwood, We at feel question out But quickly the side II I becomes So -- we adding

to the going think one we able we've So to are more when opposed to going be I fill need another as ones announced. to we're thinking we're about

Chase Mulvehill

risk hear. I'm hedged have of kind than just and basis more the widening of But curious XQ, that risk kind of kind or real ask -- year. And maybe out that good much can you Well, on of basis how I risk? of XQ maybe kind basis quick. even volume you to out your Waha risk before of then Obviously, some there's thoughts on just risk on there risk. the the the next

Matt Meloy

Sure. out the flow we we say make can want risk that our sure Yes, volume. is to there I'd

sure make moving it want Waha tightens we gets difficult if when So it. that it out, to out, can move we

and active and the So our we've sure to volumes can we transportation at get plant been away from market. out taking making

Waha As natural it hedge, far the overall in Waha. we when hedge as at basis our gas, length risk, we

we of an to want absolute is the price whole So really, what of lot kind exposure versus higher Waha spread. a

be Waha get sure want volumes We we can absolute want high. we to make So to out. prices

Chase Mulvehill

Makes questions. hopefully, And Okay. about respect ask somebody two will I'll sense. the Medford.

Matt Meloy

Thanks.

Operator

will question come Sibal our And next Sunil with Global Securities. Seaport from

Sunil Sibal

So I on the wanted capital of things. off start to side

thinking of capital the obviously, budget. raised be about how spend. So and for kind curious XXXX XXXX should we you've was I puts takes

few outlined expansion have obviously projects. You a

kind inflation So 'XX you're how from cost then that the perspective, we seeing? of about be thinking what budget? And should

Jen Kneale

Sunil, Jen. this is

accelerated really we growth need you adder the X have spending just into sooner spending think projects Greenwood the into of but given Delaware in were then we when we've continued would be Think XXXX, assets. Basin shifting volume our XXXX. and to the them acquisition that build-out about that Train about five-year XXXX. For plan, the shifting visibility And those

spending be As But levels at next the we plant much plants, year budget the whether look of needed potential growth side on the with will that we into part expect next or side. capital on next the I'd impact XXXX, Greenwood size be Delaware I spending what capital on our will of Company. will very think commiserate that for be the that

visibility so processing those that other I we've associated expansions, project lot or looping projects more large on we call with growth next a we we transportation and as incremental also other timing transport of don't road. down the than just beyond have And more. already NGL dependent But capacity we've have that, what volumes. spend announced additional would the Grand depending a to to gotten again, bigger, screen the on Prix radar that we're just on be the continued seeing large be of The volume of what flexibility that NGL will one the That growth. have project on and

Sunil Sibal

Just to clarify.

in bit So that unless should a you that what see on step-down projects, announced? you announce you're CapEx you saying is 'XX more all of based a

Jen Kneale

following And frame a Train down. have do X frac is time on on year. got But We don't in February, levels. ultimately, know volume it's there material footprint guidance that us and with say to the next when Greenwood may this I'd I'd growth shifting spending a on that in if next that for guidance project. next and I year may We'll year that CapEx growth see we'll our point have say very visibility otherwise with this have looming in at around impact into forward move into occurred I shifting where that's isn't typical next the formal that pinch asset point capital our these spending result the otherwise this that with spending something needing will we're comfortable large of occurred increasing out year. that would we think have spending year. We've provide time. step our spending then there some to provide within

Sunil Sibal

was then to second And from are understand methane facilities. related it. I that question emissions my the in to Got processing limiting IRA. some provisions with that there regard

your impacts should to do I does So footprint? But think was in if how you IRA. obviously plans kind with Or tie emissions. about reduce to You've requirements we in that. And through that? how plans think you look that new your curious of methane chance highlighted a had

Matt Meloy

Yes, sure.

tax what it. group a -- what that at evaluating bit active at at in took our ES&H of kind So the were look or this quite our We about. round entail. could We came yes, looking it last actually been the methane a regulations has really

are We our improving our on intensity. focused reducing emissions,

forward lot a projects with we're reduce have that. We of try to and that moving

and meeting are parameters good everything at those we're ultimate to see the So all I and what for operating what the setting very what think Group on limits we'll And we'll And the that. -- else. task is up fee or -- compliance, ES&H very at regulations. the our good rules

early. But very to We'll passed. ultimately well. say actively focused have see it's what working So it, I'd gets we'll perform are on and it on we

Operator

And our with Sachs. come John Mackay next from Goldman question will

John Mackay

I start on wanted to L&T.

going a But the margins should a kind on just little strong a about about of going what's is Was quarter? on on You talk guys of unit bit were, being it rate marketing forward? volumes given weak. kind how this think one-off this run touched Or dipping? little margin could just that bit you we

Scott Pryor

roll fractionation quarter. assets on transportation at that look and when typical the quite and volumes down for somewhat a Mont when that to that our us we've we active strong seasonal through we John, the of be in second in not growth there. as it relates Belvieu. obviously, off, flowing volumes second first would would that's -- we quarter. record With quarter into that, had optimization first would said, -- I that the volume around I and side, had some the our as marketing very say, We've increased And had

that that ledger, some seeing transportation seen going in consistent, toward be our growth then the be challenges. to our on pricing, those with we're way So continue to But as Obviously, And business in we're U.S. international pricing very presents that some volumes with to increases steered continues We're that as are seeing is the really G&P of quarter to across out. over nice increase our all well volume going the the the we've all, quarter export volumes pricing itself and assets that. on our to fractionation with today, footprint. backwardation time. see side it

those So sit. just it we our -- X we we've Trade volumes. as and to where of And bringing lot to on. feel fractionation comfortable see do announcement we work to there train opportunities around the grow bringing to very got continue Obviously, that back relates a with

John Mackay

Maybe export of We've that there, year. unpacking just for demand of just the bit petchem of and in you you of should just now a kind trend share the rest what Maybe business. where terms right. can said that some All the see sitting how overall. little in softness seen right you

Scott Pryor

that is perspective, you're to? international an what referring From

John Mackay

export Yes, business. for the

Scott Pryor

and quarter our more a has Well, the again, business. side seen in export on the from probably of consistency quarter challenge we've butane been There out. of volumes,

Some of compressed. side. yes, internationally, been the that's as it's on little related been for have propane little backwardation, tougher But again, more bit a a -- Spreads well butane as seeing that we're butane. on

behind prices also butane prices. are internationally, actually propane seen have trailing We that

at you And our across so We with cancellations contracts. look look our economies, with dealing some issues term had when very we'll overseas, the obviously, you dock. We've not with at challenges. risk consumption of comfortable, though, potential the feel waterborne be any the when just facing traders,

adding believe also will year, comfortable feel come again, we'll online consistency see very we, that with that some We mid expansion next So flexibility. additional with that. our

So entire that the all of our our relative export side. cadence I business think overall in expansions downstream doing all, that we're upstream complements business looks smooth our to very across

Operator

will And with next question Energy Michael Cusimano Partners. from Pickering our come

Michael Cusimano

hedge have 'XX, the the system. losses on million hundred year. math you $XXX of remaining for rest almost And my disclosures are year-to-date shows realized couple numbers my for stale, G&P of of On kind but a of the

talk high? about I are net hoping potentially 'XX looking priced sure where you But a even year into So weakness, I almost commodity if spot could realizations more prices just hedge you benefit like necessarily. given just recent not rolling even off. those clarity going they're We're there's hedges. It next seems was can like the tailwind a was $XXX stay there. next hoping year some million from give

Jen Kneale

XXXX in prices higher XXXX. at to relative hedged have We

nice a provide us. tailwind for will that So

higher now I'd they commodities, say XX% all across prices call look you where If are, it, than for plus are XXXX. hedge right our that

saying for just a well in will you're be continued as think growth tailwind So right us well. nice that that, volume as as I

prices higher in will backwardation like market, tailwind additional prices given continued those be the have seeing a as then nice we well. we on we're higher if the realize So as more that prompt volumes,

Michael Cusimano

helpful. system. seen in and just And volumes a the then the about of I've frac part I'll on direct Got it. your result strength take Medford of very the are And impact that. asking bait kind That's of which

Matt Meloy

Yes.

market the kind previously. tied. is some that moving really is Belvieu. volumes frac have more It's combination The I from overall So a of frac answer you industry of Y-grade. And to from volumes the question market increased operational upsets

So is to some up yes, Belvieu the tightening extent. that

Operator

conclude session. And Sanjay any for question-and-answer over to this our conference I'd closing the like remarks. Lad to turn will back

Sanjay Lad

Thanks and you call The interest was day. will may we appreciate Resources. Great. for that follow-up on any your a to in available the be great Have team everyone IR have. this morning, questions Targa

Operator

Thank conference for now concluded. The attending today's has presentation. you

this time. may your lines You now disconnect at

Targa Resources (TRGP) 4 Aug 222022 Q2 Earnings call transcript