KEY POINTS
- Enbridge will buy Tallgrass’s crude oil business for $2.55 billion.
- The deal includes a 75% stake in the 460,000-bpd Pony Express Pipeline.
- Enbridge will also gain crude storage, pipeline and marketing assets.
Canadian energy infrastructure company Enbridge has agreed to acquire Blackstone-owned Tallgrass Energy’s crude oil business for $2.55 billion in cash, in a move that will significantly expand its liquids pipeline operations in the United States.
The deal will give Enbridge a majority interest in the Pony Express Pipeline and stakes in other crude transportation and storage assets. The company said the acquisition will strengthen its position in some of the United States’ major oil-producing regions while creating opportunities to combine the new assets with its existing operations.
Enbridge will acquire a 75% interest in the Pony Express Pipeline, a 1,050-mile crude oil transportation system with capacity to move about 460,000 barrels per day.
The pipeline connects crude production areas in the Rocky Mountain region with the Cushing, Oklahoma, storage hub, one of the most important oil storage and trading centres in the US. It also provides access to around 500,000 barrels per day of refining capacity.
The acquisition will deepen Enbridge’s exposure to the Bakken, Powder River and Denver-Julesburg basins, which are important sources of US crude production.
Enbridge expects the Pony Express assets to work alongside its existing Express-Platte pipeline system, potentially improving efficiency and generating operational synergies.
Storage and marketing assets included
The transaction goes beyond the Pony Express pipeline. Enbridge will also acquire a 51% interest in the Powder River Gateway pipeline system.
The deal includes nearly 8.4 million barrels of crude oil storage spread across nine terminals connected to the Pony Express system. Enbridge will also take control of the crude oil marketing business Stanchion Energy.
The combination of pipelines, storage facilities and marketing operations will give Enbridge a broader presence across the crude oil supply chain.
Enbridge expects the transaction to close later in 2026, subject to regulatory approval.
The company said the acquisition should increase distributable cash flow per share in the first full year after completion. Despite the purchase, Enbridge maintained its existing 2026 financial guidance.
The company plans to partially finance the transaction through an equity offering. The announcement comes shortly after Enbridge agreed to acquire Salt Creek Midstream’s crude gathering business on August 26.
Enbridge executives said the company is taking a cautious approach to financing the acquisitions to preserve financial capacity for future projects.
Management said the company could also use asset sales, partnerships and other financing structures to maintain flexibility as it expands.
Enbridge currently has a C$41 billion secured growth backlog. The company expects to support its planned investments with annual growth capital capacity of between C$10 billion and C$11 billion.
