Targa to Acquire Stakeholder Midstream in $1.25 Billion Permian Expansion Deal
Targa Resources is acquiring Stakeholder Midstream for $1.25 billion, adding 480 miles of Permian gas pipelines and expanding its sour-gas treating and carbon-capture operations. The deal strengthens Targa’s Permian position and adds $200 million in annual free cash flow.
HOUSTON (P&GJ) — Targa Resources Corp. has agreed to acquire Stakeholder Midstream LLC for $1.25 billion in cash, expanding its gathering and processing footprint in the Permian Basin and bolstering its sour-gas treating capabilities.
Stakeholder operates about 480 miles of natural gas pipelines, roughly 180 MMcf/d of cryogenic processing and sour-treating capacity, and a small crude gathering system. The company also engages in carbon capture and storage (CCUS) projects generating 45Q tax credits.
The assets are supported by long-term, fee-based contracts across approximately 170,000 dedicated acres with stable volumes and low decline rates.
Targa expects Stakeholder to generate about $200 million annually in unlevered adjusted free cash flow with minimal capital requirements and low integration costs.
“This acquisition is a nice bolt-on asset that has meaningful free cash flow supported by a stable to modestly growing volume profile with minimal capital needs and executed at an attractive valuation,” said Matt Meloy, CEO of Targa. “We believe this transaction is a continuation of our strategy of identifying opportunities to create shareholder value with balance sheet strength.”
“We are very familiar with the acquired assets and have strong relationships with some of the largest producers on the system,” Meloy added. “Targa’s organic growth opportunity set coupled with this accretive bolt-on transaction positions us well to enhance our already strong growth profile.”
Stakeholder’s Co-CEO Gaylon Gray said the company was proud of its role in building midstream infrastructure across the San Andres play and thanked its partner, EnCap Flatrock Midstream.
The acquisition, funded through Targa’s existing liquidity and revolving credit facility, is expected to close in the first quarter of 2026, subject to customary regulatory approvals. RBC Capital Markets advised Targa, while Jefferies served as Stakeholder’s exclusive financial advisor.