Targa earns its living in the space between the oil well and the final buyer. Its business has two halves. The first collects the raw gas that comes up with oil, through pipes laid across the fields, and cleans it in processing plants.
Two things leave those plants. One is ordinary gas, ready for the pipeline, which Targa sells to utilities, factories and traders. The other is a mixture of liquids such as propane and butane.
The second half carries that mixture to the Gulf Coast. There, fractionation plants, that is, plants that split the mixture into its separate products, turn it into goods that can be stored, sold at home or loaded onto ships for buyers abroad.
Take an oil producer in the Permian. It cannot sell its gas until someone collects it, so it pays Targa for the service. Sometimes it pays a fee; sometimes it lets Targa keep a share of what the gas fetches.
Targa's profit is the gap between what it collects and what it pays, including the gas it buys. Prices move both sides of that gap. We read this to mean that profit depends more on how much passes through the system than on prices. The contracts that pay Targa a share of the proceeds are the exception: they leave it exposed to prices, and they are only partly hedged.
Targa keeps widening its network. In January 2026 it paid $1.2 billion for Stakeholder Midstream, adding about 480 miles of gas pipelines in the Permian. Each of these pipes earns money only while the wells around it keep producing.