- Sanchez Energy (SN +7%) and Targa Resources Partners (NGLS +2.2%) enter a 50-50 joint venture agreement to construct a cryogenic natural gas processing plant and associated high pressure gathering pipelines near SN's Catarina asset in Texas' Eagle Ford shale.
- The plant is expected to be operational in early 2017 and will have initial capacity of 200M cf/day; NGLS says it will design, build and operate the plant and contribute $125M to the project, while SN will contribute $115M.
- The deal is expected to help SN lower the gathering and transportation fees it pays for the Catarina plant, and will allow NGLS to grow its presence in the Eagle Ford Shale.
- Separately, NGLS projects 15% Y/Y dividend growth in 2016 and dividend coverage of ~$1x.
- TRGP +8.3%.