Carbon capture moves into Permian midstream deals

Targa’s Stakeholder deal signals carbon capture is now a core midstream strategy, not a side project, as Permian assets align with 45Q-driven growth

20 Jan 2026

Carbon capture is becoming a central feature of US midstream consolidation, as infrastructure groups begin to fold emissions management into large-scale asset deals. The trend is visible in Targa Resources’ agreement to acquire Stakeholder Midstream, a transaction that adds both gathering infrastructure and carbon capture operations in the Permian Basin.

Targa said the deal would expand its footprint in one of North America’s most active oil and gas regions. Alongside traditional midstream assets, Stakeholder’s portfolio includes carbon capture activities that qualify for federal 45Q tax credits, which provide incentives for capturing and storing carbon dioxide.

The acquisition reflects a broader shift in the sector. Carbon capture was previously treated as a parallel or experimental activity, often developed separately from pipelines and processing plants. Midstream companies are now moving those capabilities inside their core operations as producers and investors place greater emphasis on emissions performance.

The Permian Basin has become an early testing ground for this approach. Its scale, long asset life and concentration of large operators make it attractive for integrating carbon management with existing infrastructure. For midstream groups, owning capture capacity can offer an additional revenue stream while supporting customers facing tighter environmental scrutiny.

The 45Q programme has played a key role in accelerating interest. The credits are designed to improve project economics, but they also require careful monitoring and compliance to ensure captured carbon meets eligibility rules. That has encouraged companies to seek more direct control over capture systems rather than relying on third-party providers.

The strategy carries risks. Carbon capture adds technical and regulatory complexity to businesses traditionally focused on transport and processing. Returns remain sensitive to policy stability, and future changes to tax incentives could affect project economics.

Even so, recent transactions suggest carbon capture is moving from the margins into mainstream midstream planning. In the Permian, competition is increasingly shaped not only by capacity and efficiency, but also by the ability to deliver lower-carbon infrastructure at scale.