Targa Resources Corp. (TRGP): 2Q26 Preview: Looking for Signs of Permian Gas Growth Ahead of Strong 2H26+

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Targa Resources Corp. (TRGP): 2Q26 Preview: Looking for Signs of Permian Gas Growth Ahead of Strong 2H26+

mentum. Optimization aside, we remain constructive on

Permian gas growth upside. We expect an influx of gas and associated NGL volumes to

grow in 3Q26+ as Permian gas pipeline capacity is added through 1Q27. While the

company should see lower optimization opportunities over time, we see ongoing volume

growth to be more significant to estimates and more supportive to the TRGP story. We

expect strong G&P growth to also support TRGP’s downstream business as the company

handles most of its own NGL volumes. We watch for the magnitude and pace of growth

in 2H26 as curtailments return. Note on the 1Q26 earnings call, management pointed to

~200-400 mmcf/d of shut-ins during any given period. To date, there has been an

improvement in Waha prices since late 2Q as Permian egress has increased though we

expect a further and greater volumetric (and stronger price response) with the

in-service of Hugh Brinson and Blackcomb through 2H26+. Upside from here could be

driven by stronger continued underlying growth, incremental commercial wins, and a

faster pace of volume recovery. We watch for the return of flush production and

potential upside into 2027+.

Downstream expansion opportunities. With an expected influx of gas volumes into

2H26 and 1H27, we look for growth opportunities across TRGP’s downstream platform.

The company has previously pointed to potential export expansions including additional

expansion at Galena Park and potential ethane export capabilities (though not near

term). We note increasing ethane export capacity for its peer ET who recently

announced an expansion at its Nederland facility - we look for TRGP’s willingness to

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