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Renewable Energy From Concho Valley Will Power Targa’s Permian Natural Gas Plant
11/22/2021
Concho Valley Solar LLC, a joint venture between Merit SI and Komipo America, Inc., has signed agreements with Targa Resources Corp. to supply low-cost renewable electricity to Targa's natural gas processing infrastructure in West Texas' Permian Basin as of this month. Through this long-term power purchase agreement (PPA), Concho Valley Solar will deliver low-cost, renewable electricity to Targa to support the company's efforts to reduce greenhouse gas emissions.
In North America, Targa Resources Corp. is a leading provider of midstream services. Through its assets, the company provides access to natural gas and natural gas liquids (NGLs) for domestic and international markets with a growing demand for cleaner fuels.
Merit SI is fully focused on maximizing the cost-effectiveness of solar production by providing design/build services and energy asset agreements that require zero capital investment. With years of experience in the power industry, Merit Controls offers advanced, proven grid integration solutions for large-scale commercial, industrial, and utility power grids.
The foundation of Komipo America, Inc. is based on its world-class power plant construction and operation technology, focusing on the production of high quality, stable power through thermal power, wind power, solar power, and fuel cell power.
As for this specific venture, a 160 MWac solar project near San Angelo in Tom Green County, Texas has already gone under construction since the beginning of the quarter, and it is expected to start delivering clean, renewable energy in exactly a year from now, in the fourth quarter of 2022, given nothing unforeseen happens. The project will use high-efficiency bifacial solar photovoltaic (PV) modules to produce clean energy while minimizing effects on wildlife, habitat, and other ecosystem resources.
Additionally, due to Pioneer Natural Resources ownership of part of Targa's Midland Basin gas processing infrastructure, it will also benefit from installing renewable electricity generated through the Concho Valley Solar project, increasing its emissions reduction efforts through renewable energy purchases.
In supporting this project and exploring future joint opportunities, Pioneer and Targa are demonstrating their commitment to leading the way in reducing emissions throughout the Midland Basin.
Concho’s project also boasts some other lucrative benefits: by providing reliability services to the grid through an advanced power plant control platform, the project will be able to generate incremental revenue from intermittent renewable power plants. While construction of the facility itself is expected to generate approximately 150 jobs, allowing Tom Green County taxing entities to see increased revenues over the project's lifetime.
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From Beginnings to a $7.1 Billion Milestone: Deal-Making Histories of Energy Transfer and Crestwood - Complex Review by Rextag
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Energy Transfer's unit prices have surged over 13% this year, bolstered by two significant acquisitions. The company spent nearly $1.5 billion on acquiring Lotus Midstream, a deal that will instantly boost its free and distributable cash flow. A recently inked $7.1 billion deal to acquire Crestwood Equity Partners is also set to immediately enhance the company's distributable cash flow per unit. Energy Transfer aims to unlock commercial opportunities and refinance Crestwood's debt, amplifying the deal's value proposition. These strategic acquisitions provide the company additional avenues for expanding its distribution, which already offers a strong yield of 9.2%. Energized by both organic growth and its midstream consolidation efforts, Energy Transfer aims to uplift its payout by 3% to 5% annually.
Targa Resources: $3.55 Billion Cash Transaction to Acquire Lucid Energy
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On June 16 Targa Resources Corp. decided to acquire Lucid Energy Group, located in the Permian Basin, which is a part of Riverstone Holdings LLC and Goldman Sachs Asset Management. Firstly, Targa enlarged due to the recent “blot-on” acquisition of Southcross Energy in the Eagle Ford for $200 million and it will become bigger thanks to the $3.55 billion cash transaction. Targa’s financial position allowed it to utilize convenient opportunities to extend its company so it bought #Lucid using available cash and debt with an estimated pro forma year-end 2022 leverage around 3.5 times. According to Targa’s estimates, the acquisition of Lucid will increase the number of natural gas pipelines by 1,050 miles and add about 1.4 Bcf/d of cryogenic natural gas processing capacity in service or under construction located mainly in Eddy and Lea counties of New Mexico. The investment-grade producers source approximately 70% of current system volumes. According to the press release, a full-year standalone adjusted EBITDA is expected to be between $2.675 billion and $2.775 billion and reported year-end leverage ratio of about 2.7 times. Targa’s updated financial expectations assume NGL composite prices average $1.05 per gallon, crude oil prices average $100/bbl, and Waha natural gas prices average $6 per MMBtu for the remainder of 2022.
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As world leaders gather at the COP29 climate summit, a surprising trend is emerging: some of the biggest oil companies are scaling back their renewable energy efforts. Why? The answer is simple—profits. Fossil fuels deliver higher returns than renewables, reshaping priorities across the energy industry.
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