Targa Resources is set to take full ownership of the Grand Prix NGL pipeline in the Permian Basin, US through an all-cash deal worth $1.05bn with Blackstone Energy Partners, an energy-focused private equity business.

In this connection, the midstream services provider has signed a definitive agreement with Blackstone Energy Partners to acquire the latter’s 25% stake in the natural gas liquids (NGL) pipeline.

The 25% stake in the NGL pipeline was sold by Targa Resources to funds managed by Blackstone Energy Partners in September 2017.

Commissioned in 2019, the Grand Prix NGL pipeline can transport up to one million barrels per day of NGLs to the NGL market hub at Mont Belvieu, Texas.

The pipeline connects the gathering and processing positions of Targa Resources throughout the Permian Basin, North Texas, and Southern Oklahoma. The NGLs are transported to the company’s fractionation and storage complex located at Mont Belvieu.

According to Targa Resources, the price of the acquisition represents nearly 8.75 times the estimated 2023 adjusted EBITDA multiple of the Grand Prix NGL pipeline. Besides, it is said to enable the company to further benefit by now holding 100% of the recently announced Daytona pipeline expansion of the Grand Prix pipeline.

The Daytona NGL pipeline will transport NGLs sourced from the Permian Basin and connect to the 30-inch diameter portion of Grand Prix in North Texas.

Targa Resources CEO Matt Meloy said: “The performance of our Grand Prix NGL Pipeline has exceeded expectations since it began full operations in the third quarter of 2019, integrating our leading NGL supply aggregation position in the Permian Basin to key demand markets in Mont Belvieu and along the U.S. Gulf Coast.

“Our business has strong momentum for 2023 and this acquisition further simplifies Targa while also increasing our fee-based margin and providing additional cash flow stability.”

The deal is anticipated to close in Q1 2023, said the publicly-listed midstream services provider.