Enbridge it agreed to acquire crude oil transportation, gathering, storage, and terminal assets from Tallgrass Energy for US$2.55 billion. The transaction expands the company’s presence in the U.S. Rocky Mountains and allows it to acquire a majority stake in the Pony Express pipeline and the Powder River Gateway system.
With this transaction, seeks to more directly connect production from the Powder River and Denver-Julesburg basins with Cushing, Oklahoma, one of the main oil storage and marketing centers in the United States.
Enbridge will incorporate 75 % of the Pony Express pipeline
The acquisition includes a 75 % stake in Pony Express, an approximately 1,690 kilometer pipeline connecting Guernsey, Wyoming, and several points in Colorado with Cushing. The system has an average annual capacity of approximately 460,000 barrels per day and provides direct access to around 500,000 barrels per day of refining capacity. With its incorporation, Enbridge will add to its network a strategic corridor to move crude oil from the Rocky Mountains to refining and marketing centers in the central United States.
Powder River Gateway will connect production with Pony Express
Enbridge will also acquire a 51 % stake in Powder River Gateway, a system comprised of the Iron Horse pipeline, approximately 129 kilometers long, and the Powder River Express pipeline, approximately 113 kilometers long. Together, these lines have a capacity of nearly 240,000 barrels per day and transport oil from the Powder River Basin to the Pony Express system. The transaction also expands Enbridge’s exposure to the Denver-Julesburg Basin, another producing region connected to the transportation corridor leading to Cushing.
The purchase includes terminals and 8.4 million barrels of storage.
In addition to the pipelines, the agreement includes approximately 8.4 million barrels of storage capacity distributed among nine terminals connected to Pony Express. These assets include a 60.3 % non-operating stake in the Deeprock crude oil terminal in Cushing. Enbridge will also incorporate Stanchion Energy, a crude oil trading company that helps move larger volumes through the acquired infrastructure.
Enbridge will take over the PXP2 expansion
The acquisition also includes the PXP2 project, a $300 million expansion of the Pony Express pipeline. According to the company, the expansion will increase the pipeline’s capacity to approximately 515,000 barrels per day. Scheduled to be operational by the end of 2027, this expansion could increase crude oil evacuation capacity from the Powder River and Denver-Julesburg basins to markets connected to Cushing.
The operation complements the Express-Platte network
Enbridge already operates the Express-Platte system, which transports crude oil from Hardisty, Alberta, to Wood River, Illinois, crossing several U.S. states. The addition of Pony Express and Powder River Gateway will give the company a greater presence in Wyoming, Colorado, and other markets linked to Rocky Mountain oil production.
According to Colin Gruending, executive vice president and president of Liquids Pipelines at Enbridge, the assets expand the company’s presence in the region and strengthen its position within crude oil transportation in North America, Enbridge expecting to close the acquisition during 2026, the company estimates that the transaction represents a multiple of between 10 and 11 times the future enterprise value relative to EBITDA and anticipates obtaining additional cash flow, along with potential operational synergies within its pipeline network.
Source: Enbridge
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