Pipeline operator Targa forecasts core profit above estimates on boost in gas volumes

Feb 20 (Reuters) - Targa Resources TRGP.N forecast full-year adjusted core profit above analyst expectations on Thursday, benefiting from increased demand and higher transport volumes of natural gas and natural gas liquids through its pipelines.

The U.S. Energy Information Administration (EIA) reported that oil production in the country rose 260,000 barrels per day (bpd) month-over-month to a record 13.46 million bpd in October as demand surged to its highest levels since the pandemic.

Oil and gas transportation companies in the U.S. gained in 2024, fueled by hopes of growing electric generation associated with artificial intelligence operations, cryptocurrency mining and data centers, with Targa rising nearly 104% last year.

U.S. natural gas futures NGc1 rose 24.3% in the quarter ended December 31, positively impacting pipeline operators' margins, reducing operational costs and potentially boosting natural gas transportation demand.

Targa's total quarterly natural gas sales were up nearly 2% at 2.78 billion British thermal units per day (BBtu/d) from the previous year.

NGL pipeline transportation volumes were up at 871,500 barrels per day (Bbl/d) in the October-to-December quarter, from 722,000 bbl/d last year.

NGL sales in the company's logistics and transportation segment were 1.23 billion Bbl/d in the reported quarter, compared with 1.13 billion Bbl/d a year earlier.

On an adjusted basis, Targa's adjusted core profit was $1.12 billion in the reported quarter, beating analysts' average estimate of $1.10 billion, according to data compiled by LSEG.

Targa forecast continued growth across its Permian footprint, which is expected to drive record production at the basin, NGL pipeline transportation and LPG export volumes in 2025 compared with records set in 2024.

The Houston, Texas-based company expects 2025 adjusted core profit to be between $4.65 billion and $4.85 billion. Analysts were estimating a profit of $4.63 billion.