Houston’s Targa puts $950 million into Bakken assets

Houston-based pipeline and processing company Targa Resources will pay $950 million to expand into the lucrative Bakken shale play of North Dakota, the company said Thursday.

Targa will acquire a 155-mile pipeline network from Saddle Butte Pipeline, which also includes storage capacity for a combined total of 70,000 barrels of crude oil, Targa said.

“We are very excited to expand our geographic footprint into one of the most important oil-producing basins in the country,” Joe Bob Perkins, CEO of the general partner of Targa Resources Partners, the company’s pipeline arm, said in a statement. “The visible, long-term growth potential of this business complements our attractive portfolio of ongoing and future organic growth projects and enhances the Partnership’s longer term distribution growth.”

Targa will fund the acquisition with 50 percent debt and 50 percent equity, the company said.

Targa’s midstream assets are mainly focused around the Gulf Coast, including facilities in Mont Belvieu, Galena Park, Lake Charles, La., as well as in the Permian Basin of West Texas and the Fort Worth Basin of North Texas.

In addition to the new crude oil assets, the Bakken acquisition also includes 95 miles of natural gas gathering pipelines and a gas processing plant with a capacity of 20 billion cubic feet.

Drilling and production in the Bakken shale have made North Dakota the nation’s second-largest oil-producing state after Texas. However, much of the rapid development there has outpaced infrastructure to move crude and natural gas to market. That has made midstream assets like pipelines, processing plants and storage more valuable there.