Enbridge has agreed to acquire the crude oil transportation business of US-based energy infrastructure company Tallgrass Energy in a cash transaction valued at $2.55bn (C$3.52bn).
The deal, to be executed via a wholly owned subsidiary, will significantly expand Enbridge’s US crude operations.
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The purchase includes a 75% stake in the 1,050-mile Pony Express Pipeline system, which connects oil production in the Rockies to a storage hub in Cushing, Oklahoma. This system provides access to approximately 500,000 barrels per day (bpd) of refining capacity.
Enbridge will also acquire a 51% interest in the Powder River Gateway system, comprising two crude pipelines with a combined delivery capacity of around 240,000bpd.
Other assets covered in the agreement involve approximately 8.4 million barrels of storage capacity across nine crude terminals linked to Pony Express, as well as a 60.3% non-operating interest in the Deeprock Crude Terminal in Cushing.
The deal also includes the acquisition of Stanchion Energy, a crude marketing subsidiary of Tallgrass.
Enbridge indicated that most of the contracted volume on Pony Express is tied to investment-grade customers and that takeaway capacity from the Denver-Julesburg and Powder River basins closely aligns with forecast production rates.
The acquisition will add the PXP2 expansion project to Enbridge’s secured growth backlog, a $300m investment expected to boost Pony Express capacity to approximately 515,000bpd. PXP2 is set to enter service in late 2027.
Enbridge liquids pipelines executive vice-president and president Colin Gruending said: “This acquisition strengthens Enbridge’s position as North America’s leading crude oil transporter and expands its footprint into the US Rockies region.
“The Pony Express system is a premier crude oil corridor connecting some of North America’s most productive basins with key refining and market centres. These assets complement our broader North American footprint.
“As operator of Pony Express, we look forward to leveraging Enbridge’s proven operational capabilities to safely and reliably serve customers across the system.”
Enbridge expects the acquisition to increase distributable cash flow per share in the first full year after closure but said its 2026 financial guidance remains unchanged given the projected completion date.
The company plans to partly fund the acquisition and its August 2026 purchase of Salt Creek Midstream’s crude oil-gathering business through an equity offering.
Citi managed the financial advisory side of the deal, with Sidley Austin and Sullivan & Cromwell handling legal counsel.
Expected to close in late 2026, the deal remains subject to standard regulatory approvals including US antitrust clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
