Enbridge entered a definitive agreement to acquire Tallgrass Energy’s crude oil transportation, gathering, storage, terminaling and marketing business for $2.55 billion in cash, subject to customary closing adjustments. The contract fixes the proposed transaction, but the assets have not yet changed hands.
The largest component is a 75% interest in the 1,050-mile Pony Express Pipeline, whose approximate annual capacity is 460,000 barrels per day. The system links production in the U.S. Rockies to Cushing, Oklahoma, and provides direct access to about 500,000 barrels per day of refining capacity.
Enbridge would also acquire 51% of the Powder River Gateway system, formed by two pipelines with combined capacity of roughly 240,000 barrels per day. The package includes about 8.4 million barrels of storage across nine terminals, a 60.3% non-operating interest in the Deeprock terminal and Stanchion Energy’s crude marketing business.
The acquisition expands Enbridge into the Powder River and Denver-Julesburg basins and connects those markets with its existing Express-Platte network. Management argues that combining the systems could improve access between Rocky Mountain production, the Bakken and the Cushing trading and refining hub, although the expected synergies remain prospective.
Pony Express is contracted largely with investment-grade counterparties through the decade. The acquired portfolio also includes the $300 million PXP2 expansion, backed by take-or-pay contracts, which is expected to lift Pony Express capacity to about 515,000 barrels per day and enter service in late 2027.
Enbridge values the purchase at an estimated 10 to 11 times forward enterprise value to EBITDA and expects it to increase distributable cash flow per share in the first full year of ownership. These are company estimates; the late-2026 closing timetable means the announcement is not expected to materially change 2026 guidance.
An equity offering will partially finance this transaction, the separately announced Salt Creek Midstream acquisition and additional growth flexibility. Enbridge says it intends to preserve investment-grade ratings and leverage of 4.5 to 5.0 times debt to adjusted EBITDA while funding a C$41 billion secured growth backlog.
Closing is expected later in 2026 and remains subject to customary conditions, including U.S. antitrust clearance under the Hart-Scott-Rodino process. Until those approvals are obtained and consideration is paid, the operational benefits, expansion schedule and financial accretion should be treated as expectations attached to a pending acquisition.
