Enbridge Expands Rockies Reach with $2.55 Billion Tallgrass Crude Deal

Enbridge Inc. has agreed to acquire Tallgrass Energy LP's crude oil business for US$2.55 billion in cash, significantly expanding its liquids transportation position across the US Rockies.

The package combines major pipeline, storage, terminal, and crude marketing assets within one strategically connected platform.

Announced Sept. 9, the transaction links production from the Bakken, Powder River, and Denver Julesburg basins with the critical crude trading and storage center at Cushing, Oklahoma.

Enbridge said the network will complement its existing Express Platte system and broaden its access to regional production growth.

"This acquisition strengthens Enbridge's position as North America's leading crude oil transporter and expands its footprint into the US Rockies region," said Colin Gruending, executive vice president and president of Enbridge Liquids Pipelines.

"The Pony Express system is a premier crude oil corridor connecting some of North America's most productive basins with key refining and market centers. These assets complement our broader North American footprint."

At the center of the acquisition is a 75% interest in the Pony Express Pipeline, a 1,050 mile crude oil system with capacity of about 460,000 barrels per day.

The pipeline moves Rockies production to Cushing while providing access to approximately 500,000 barrels per day of refining capacity.

Enbridge said Pony Express is highly contracted through the decade, with revenue supported predominantly by investment grade counterparties.

Available takeaway capacity from the Denver Julesburg and Powder River basins also remains closely aligned with expected production growth, strengthening prospects for continued utilization and future contract renewals.

The deal includes the Pony Express expansion project, known as PXP2, which is expected to require about $300 million of capital. Once completed, the project would raise system capacity to approximately 515,000 barrels per day and is scheduled to enter service in late 2027.

Commercial support for PXP2 comes from take or pay contracts, giving Enbridge additional revenue visibility as development proceeds.

That contractual structure reduces exposure to short term volume fluctuations and provides a firmer foundation for the planned capacity increase.

The acquisition is expected to close later this year, subject to regulatory approval and customary closing conditions.

Completion would give Enbridge a stronger position in an inland crude corridor that connects growing production areas with a major refining, storage, and trading hub.

The Tallgrass agreement follows Enbridge's August decision to acquire the crude gathering operations of Salt Creek Midstream for $600 million.

That separate transaction includes approximately 500 miles of gathering infrastructure serving producers in the Delaware basin, one of the most active portions of the Permian basin.

Salt Creek extends Enbridge's Permian basin to export value chain by connecting gathering assets with the company's existing transportation and export infrastructure.

Together, the Tallgrass and Salt Creek transactions widen Enbridge's presence across two crucial US crude production regions and reinforce its integrated liquids strategy.

To help finance both acquisitions, Enbridge launched a C$2.6 billion bought deal offering of common shares.

The company said proceeds will support the Tallgrass and Salt Creek purchases while preserving financial flexibility for additional growth opportunities that may emerge across its North American portfolio.

The Tallgrass package also includes a 51% interest in the Powder River Gateway system. That operation consists of two crude oil pipelines with combined capacity of about 240,000 barrels per day, adding another important route for barrels produced in the Powder River basin.

Storage represents another substantial element of the transaction, with approximately 8.4 million barrels of capacity spread across nine crude oil terminals connected to Pony Express. The portfolio includes a 60.3% nonoperating interest in the Deeprock Crude Terminal at Cushing, strengthening Enbridge's presence at a central US market location.

Enbridge will also acquire Stanchion Energy, a crude oil marketing business that adds commercial capability alongside the physical pipeline and terminal assets.

Marketing operations can help optimize transportation and storage positions while improving connections among producers, refiners, traders, and other market participants.

The purchase gives Enbridge a broader Rockies platform at a time when pipeline utilization and dependable market access remain crucial for regional producers.

With contracted capacity, planned expansion, extensive storage, and direct access to Cushing, the acquired network adds scale to an already formidable North American liquids operation.