Targa to Sell Gulf Coast Express Pipeline Stake for $857 Million

The Gulf Coast Express Pipeline, which began operating in September 2019, transports natural gas from the Permian Basin to outside Corpus Christi on the Texas Gulf Coast.

Targa Resources Corp. disclosed the sale of its 25% equity interest in the Gulf Coast Express Pipeline to an undisclosed company on Feb. 3 for $857 million.

The divestiture was viewed as an increasing likelihood by the market, according to to analysts with Tudor, Pickering, Holt & Co. (TPH), given completion of Targa’s “DevCo” buy-in last month and management commentary highlighting the asset as a potential sale candidate. Still, TPH said the price tag for the 2 Bcf/d natural gas pipeline exceeded expectations and should accelerate the simplification of Targa’s capital structure.

“The transaction price comes in well ahead of the previously rumored ~$750 million and reduces the net DevCo outlay to just $68 million (TPHe <1.0x EBITDA multiple) for the remaining Grand Prix and Frac 6 interests,” TPH analysts wrote in a Feb. 4 research note.

Already have an account? Log In

Sign up for FREE access to view this article now!

Unlock Free Access

Emily Patsy

Emily Patsy is the senior managing editor for Hart Energy’s Digital News Group. She's responsible for the daily news flow and also manages the A&D Watch and Energy Pulse weekly newsletters.