CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

Exhibit 10.2

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

     THIS CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of February 14, 2007, is entered into by and among TARGA RESOURCES PARTNERS LP, a Delaware limited partnership (“MLP”), TARGA RESOURCES OPERATING LP, a Delaware limited partnership (“OLP”), TARGA RESOURCES GP LLC, a Delaware limited liability company (“GP”), TARGA RESOURCES OPERATING GP LLC, a Delaware limited liability company (“OLP GP”), TARGA GP INC., a Delaware corporation (“GP Inc.”), TARGA LP INC., a Delaware corporation (“LP Inc.”), TARGA REGULATED HOLDINGS LLC, a Delaware limited liability company (“TRH”), TARGA NORTH TEXAS GP LLC, a Delaware limited liability company (“North Texas GP”), and TARGA NORTH TEXAS LP, a Delaware limited partnership (“North Texas LP”). The parties to this agreement are collectively referred to herein as the “Parties.” Capitalized terms used herein shall have the meanings assigned to such terms in Section 1.1.

RECITALS

     WHEREAS, GP, LP Inc. and GP Inc. have formed MLP, pursuant to the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”), for the purpose of engaging in any business activity that is approved by GP and that lawfully may be conducted by a limited partnership organized pursuant to the Delaware LP Act.

     WHEREAS, in order to accomplish the objectives and purposes in the preceding recital, the following actions have been taken prior to the date hereof:

1. GP Inc. formed North Texas GP under the terms of the Delaware Limited Liability Company Act (the “Delaware LLC Act”), and contributed $1,000 in exchange for all of the member interests in North Texas GP.

2. North Texas GP and LP Inc. formed North Texas LP under the terms of the Delaware LP Act, to which North Texas GP contributed $500 and LP Inc. contributed $500 in exchange for a 50% general partner interest and a 50% limited partner interest, respectively.

3. Targa Midstream Services Limited Partnership (“TMS”) conveyed beneficial title to the assets, generally referred to as the North Texas Assets it acquired from Dynegy, Inc. (the “North Texas Assets”) to North Texas LP on behalf of North Texas GP and LP Inc. in part as a capital contribution and in exchange for a promissory note/acquisition payment obligation of $408,090,000 from North Texas GP and a promissory note/acquisition payment obligation of $408,090,000 from LP Inc. (collectively the “Intercompany Debt”).

4. TRH conveyed all of its right, title and interest in and to the member interest in Targa Intrastate Pipeline LLC, a Delaware limited liability company to North Texas LP.

5. North Texas LP assumed the obligations of North Texas GP and LP Inc. under the Intercompany Debt.

6. TMS conveyed legal title to the North Texas Assets to North Texas LP on behalf of North Texas GP and LP Inc.

7. GP Inc. formed GP, under the terms of the Delaware LLC Act, and contributed $1,000 in exchange for all of the member interests in GP.

8. GP, LP Inc. and GP Inc. formed MLP, under the terms of the Delaware LP Act, to which GP contributed $20 and LP Inc. and GP Inc. each contributed $490 in exchange for a 2% general partner interest, a 49% limited partner interest and a 49% limited partner interest, respectively (together, the “MLP Formation Interests”).

9. MLP formed OLP GP under the terms of the Delaware LLC Act, and contributed $1,000 in exchange for all of the member interests in OLP GP.

10. OLP GP and MLP formed OLP, under the terms of the Delaware LP Act, to which OLP GP contributed $0.01 and MLP contributed $999.99 in exchange for a 0.001% general partner interest and 99.999% limited partner interest, respectively.

11. MLP, as Borrower, entered into the Credit Agreement with Bank of America N.A. as Administrative Agent and the other lenders party thereto.

     WHEREAS, immediately prior to the closing of the MLP’s initial public offering (“MLP IPO”), GP Inc. will convey a part of its member interest (the “Interest”) in North Texas GP to GP equal to 2% of the equity value of the MLP at the end of the MLP IPO closing based upon the IPO pricing.

     WHEREAS, at the MLP IPO closing, each of the following actions shall occur:

1. GP will convey the Interest to MLP in exchange for (a) a continuation of its 2% general partner interest and (b) the incentive distribution rights (the “IDRs”).

2. GP Inc. will convey its remaining member interest in North Texas GP to MLP in exchange for 5,475,052 subordinated limited partner units (“Sub Units”) representing limited partner interests with an 18.94% interest in the MLP.

3. LP Inc. will convey all of its limited partner interest in North Texas LP to MLP in exchange for 6,053,179 Sub Units with a 20.94% interest in MLP.

4. The public, through the Underwriters, will contribute $352.8 million in cash, less the net amount of $21.7 payable to the Underwriters after taking into account the Underwriters’ discount and the structuring fees payable to the Underwriters in exchange for 16,800,000 Common Units in MLP (representing a 58.1% interest).

5. MLP will (a) pay transaction expenses associated with the transactions contemplated by this Agreement in the amount of approximately $4.0 million (exclusive of the Underwriter’s spread and the structuring fee) and (b) pay fees and expenses associated with the Credit Agreement in the amount of approximately $4.2 million and (c) contribute the balance of the cash received from the public to North Texas LP as a capital contribution (50% on behalf of North Texas GP and 50% on behalf of LP Inc.).

6. MLP will borrow $342.5 million from new lenders under the Credit Agreement and contribute those funds to North Texas LP as a capital contribution (50% on behalf of North Texas GP).

7. MLP will convey its member interest in North Texas GP and its limited partner interest in North Texas LP to the OLP as a capital contribution (of which 0.001% of such contribution will be made to OLP on behalf of OLP GP).

8. North Texas LP will use the various funds contributed to it to retire the Intercompany Debt.

9. The agreements of limited partnership and the limited liability company agreements of the aforementioned entities will be amended and restated to the extent necessary to reflect the applicable matters set forth above and as contained in this Agreement.

     NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the Parties undertake and agree as follows:

ARTICLE 1
DEFINITIONS

     Section 1.1 The following capitalized terms shall have the meanings given below.

(a) “Acquisition” means consummation of the transactions contemplated by the terms of this Agreement.

(b) “Agreement” means this Contribution, Conveyance and Assumption Agreement.

(c) “Common Unit” has the meaning assigned to such term in the Partnership Agreement.

(d) “Credit Agreement” means the Credit Agreement, dated as of February 14, 2007, among MLP, OLP, the subsidiaries of the MLP, and Bank of America, N.A., as administrative agent for the lenders named therein.

(e) “Effective Time” shall mean 8:00 a.m. New York, New York time on February 14, 2007.

(f) “IDRs” means “Incentive Distribution Rights” as such term is defined in the Partnership Agreement.

(g) “MLP” has the meaning assigned to such term in the opening paragraph of this Agreement.

(h) “Offering” means the initial public offering by MLP of Common Units.

(i) “Option” means the over-allotment option afforded the Underwriters in the Offering.

(j) “Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of MLP dated as of February 14, 2007.

(k) “Sub Unit” means “Subordinated Unit” as such term is defined in the Partnership Agreement.

(l) “Underwriters” means Citigroup Global Markets Inc., Goldman, Sachs & Co., UBS Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and A.G. Edwards & Sons, Inc., Credit Suisse Securities (USA) LLC, Lehman Brothers Inc., Wachovia Capital Markets, LLC, Raymond James & Associates, Inc., RBC Capital Markets Corporation and Sanders Morris Harris Inc.

ARTICLE 2

CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS

     Section 2.1 Contribution of the Interest to GP . GP Inc. hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to GP, its successors and assigns, for its and their own use forever, all right, title and interest in and to the Interest and GP hereby accepts the Interest.

     Section 2.2 Contribution of the Interest by GP to MLP . GP hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to MLP, its successo