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Renewable Energy From Concho Valley Will Power Targa’s Permian Natural Gas Plant11/22/2021
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.
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.
Midstream companies seek partnerships, connect their most robust assets to the fastest growing markets. Let us see what they did this past February
Shareholder’s payout target was increased by 50% after the largest U.S. independent oil producer surpassed Wall Street’s earnings estimates on growing energy prices, said Houston-based Conoco Phillips Co. on Aug. 4. Due to Western sanctions on major producer Russia throttling energy supply amid a rebound in demand from pandemic lows, oil and gas #prices have soared. Crude has been trading more than 25% higher since the start of the year and results also benefited from high natural gas prices. Meanwhile, shares were down a fraction, to $91.03, in early trading but are up about 26% year to date. Conoco Phillips stated, that the average price obtained for a barrel of oil and gas accelerated 77% from a year earlier to $88.57. The company acknowledges that it has not hedged any of its oil and gas sales to make the most of higher market prices. The capacity of 1.69 million boe/d was in line with Wall Street estimates, however, the company expected the current quarter’s output would be between 1.71 million and 1.76 million boe/d.
California oil joint venture, Aera Energy, of Exxon Mobil Corp. and ShellPlc is being sold to German asset manager IKAV, according to the agreement of Sept. 1. Shell noted that the sale of its 51.8% membership interest in Aera Energy is for a total consideration of about $2 billion in cash with additional contingent payments based on future oil prices, subject to regulatory approval. However, the total transaction value was not disclosed. Being one of California’s largest oil and gas producers, Aera Energy accounts for nearly 25% of the state’s production. The sale by Exxon Mobil and Shell ends a 25-year-long partnership in California, meanwhile, it persists a streak of divestments of mature oil and gas properties by the two supermajors. Aera Energy LLC operates about 13,000 wells in the San Joaquin Valley in California, producing oil and associated gas. In 2021, Aera took out about 95,000 boe/d. Exxon Mobil’s interests in the Aera oil-production operation in California contained a 48.2% share of Aera Energy LLC and a 50% share of Aera Energy Services Co. held by Mobil California Exploration & Producing Co. Moreover, Exxon Mobil affiliates have signed a separate agreement for the sale of an associated loading facility and pipeline system. The sale effectively ends Shell’s upstream position in California. The company reported that the divestiture is valued to result in a post-tax impairment of $300 million to $400 million, subject to adjustments.
The completion of the merger between Centennial Resource Development Inc. and Colgate Energy Partners II LLC happened on Sept. 1, sealing the debut of Permian Resources Corp., which is considered the largest pure-play E&P company in the Delaware Basin. Permian Resources’ idea was to combine two successful E&P companies, creating a better, stronger, and more strategically compelling company. Centennial and Colgate announced an agreement to merge in May, denying rumors that Colgate, a privately held independent Midland-based company, had been seeking an IPO. The merger estimated Colgate at about $3.9 billion and consists of 269.3 million shares of Centennial stock, $525 million of cash, and the assumption of approximately $1.4 billion of Colgate’s outstanding net debt. Permian Resources, being the combined company, has a deep inventory of “high-quality” drilling locations on around 180,000 net acres the companies anticipate will provide more than $1 billion of free cash flow in 2023 at current strip prices, in accordance with the company release on Sept. 1.