Feb 19 (Reuters) - Pipeline operator Targa Resources TRGP.N beat Wall Street estimates for fourth-quarter adjusted core profit on Thursday, on the back of increased demand and higher transport volumes of natural gas and natural gas liquids across its systems.
U.S. natural gas futures NGc1 rose more than 11% sequentially in the fourth quarter, breaking a falling streak that started in the second quarter, driven by higher demand and increased pipeline volumes.
Midstream companies in the U.S. such as Targa and Kinder Morgan KMI.N are benefiting from strong oil and gas production in the Permian Basin, rising natgas demand driven by liquefied natural gas exports and soaring power generation tied to AI operations, cryptocurrency mining and data centers.
Targa expects to continue to benefit from growth across its Permian footprint, which is likely to drive record NGL pipeline transportation, fractionation and liquefied petroleum gas export volumes in 2026.
Additionally, Targa expects to bring online the Falcon II plant in the Permian Delaware region in the first quarter.
Total quarterly natural gas sales were up 6.2% to 2.96 billion British thermal units per day (BBtu/d) from the previous year, while NGL pipeline transportation volumes rose about 20.3% to 1,048.7 thousand barrels per day (MBbl/d).
NGL sales were 1.26 billion Bbl/d in the reported quarter, compared with 1.23 billion Bbl/d a year earlier.
NGLs are hydrocarbon liquids such as ethane, propane and butane, which are used as fuels for heating, refrigeration and gasoline blending, among others.
Targa forecast current-year adjusted core earnings to be between $5.4 and $5.6 billion, the midpoint of which is in line with analysts' average estimate of $5.5 billion according to data compiled by LSEG.
The Houston, Texas-based company posted an adjusted core profit of $1.34 billion for the quarter ended December 31, compared with analysts' estimates of $1.27 billion.
(Reporting by Pooja Menon in Bengaluru; Editing by Krishna Chandra Eluri)
((Pooja.Menon@thomsonreuters.com;))