Enbridge to acquire Tallgrass crude oil transport business for $2.55bn
A $2.55bn (C$3.52bn) all-cash deal puts Enbridge (ENB) in line for majority control of the Pony Express Pipeline and the Powder River Gateway crude system, together with associated storage capacity and Tallgrass…
Key takeaways
- Enbridge agreed to acquire Tallgrass Energy's crude oil transport business for $2.55bn (C$3.52bn) in an all-cash deal, with closing targeted for late 2026 pending US antitrust clearance.
- The deal gives Enbridge a 75% stake in the 1,050-mile Pony Express Pipeline, a 51% interest in the Powder River Gateway system, a 60.3% non-operating interest in the Deeprock Crude Terminal, and Tallgrass's crude marketing arm Stanchion Energy.
- The acquisition expands Enbridge into the US Rockies and adds roughly 8.4 million barrels of storage across nine crude terminals.
- Enbridge expects the deal to increase distributable cash flow per share in the first full year after close, plans an equity offering to help fund it, and left its 2026 financial guidance unchanged.
- The deal adds the $300m PXP2 expansion project to Enbridge's backlog, which is expected to raise Pony Express capacity to about 515,000 barrels per day by late 2027.
A $2.55bn (C$3.52bn) all-cash deal puts Enbridge (ENB) in line for majority control of the Pony Express Pipeline and the Powder River Gateway crude system, together with associated storage capacity and Tallgrass Energy's crude marketing subsidiary, with the transaction targeting a late-2026 close pending US antitrust clearance. The acquisition expands Enbridge's footprint into the US Rockies and adds roughly 8.4 million barrels of storage across nine crude terminals to its network.
The headline asset is a 75% stake in the 1,050-mile Pony Express Pipeline, carrying crude from the Rockies to the Cushing, Oklahoma storage hub and connecting to approximately 500,000 barrels per day of refining capacity. Enbridge is also acquiring a 51% interest in the Powder River Gateway system, two crude pipelines with combined delivery capacity of around 240,000 barrels per day. The package includes a 60.3% non-operating interest in the Deeprock Crude Terminal in Cushing and Stanchion Energy, Tallgrass's crude marketing arm. Enbridge said most contracted volume on Pony Express is with investment-grade customers and that takeaway capacity from the Denver-Julesburg and Powder River basins aligns closely with forecast production rates.
Enbridge expects the deal to increase distributable cash flow per share in the first full year after close. Its 2026 financial guidance remains unchanged, the company said, given the projected late-2026 completion. To partly fund this acquisition alongside its August 2026 purchase of Salt Creek Midstream's crude oil-gathering business, Enbridge plans an equity offering.
The transaction also adds PXP2 to Enbridge's secured growth backlog. That $300m expansion project is expected to lift Pony Express capacity to approximately 515,000 barrels per day and is targeted for service in late 2027.
Colin Gruending, Enbridge's liquids pipelines executive vice-president and president, said the Pony Express corridor connects some of North America's most productive basins to key refining and market centers and that Enbridge intends to bring its operational capabilities to the system as operator.
Citi handled financial advisory on the deal. Sidley Austin and Sullivan & Cromwell served as legal counsel.
Hart-Scott-Rodino antitrust clearance is the next gating step, with the close targeted for late 2026.
Filed via finance.yahoo.com