Leawood, Kan-based Tallgrass Energy has a lot on its collective plate these days and one big decision that hangs in the balance. RMR today is following the latest news from Tallgrass, which just announced a binding open season for expansion of its Pony Express Pipeline through Jan 20, 2020. The 830-mile Pony Express sources crude oil from the Bakken, DJ and Powder River basins, and runs from Wyo., through Colo., Neb., and Kan., terminating at the Cushing, Okla., crude oil hub with distribution points along the way. Placed in service in 2014, the Pony Express currently offers transport capacity of 375,000 BPD.
Tallgrass Energy Partners is an oil and natural gas pipeline company organized as a master limited partnership, founded in 2013. The company operates approximately 7,539 miles of pipeline in the U.S. states of Nebraska, Kansas, Wyoming, Colorado, Missouri, Illinois, Indiana, and Ohio.
In seven short years, Tallgrass Energy has emerged a formidable oil and gas midstream player operating pipelines, terminals, and processing and treating plants in some of the nation’s most prolific basins across 11 states. With more than 8,300 miles of natural gas pipeline, 800 miles of crude pipe, and 300 miles of water pipeline across the Upper Midwest, Rockies and Appalachia, the company also has caught the eye of one of the world’s largest private equity firms looking to take Tallgrass private. But that’s a decision yet to be made.
You might recall that Blackstone Infrastructure Partners in January purchased 100% of the membership interests in Tallgrass Energy’s general partner and a 44% interest in the company for $3.3 billion. Not surprisingly, Blackstone now wants the whole enchilada, proposing to buy the rest of Tallgrass’ Class A shares at a 35.9% premium and taking the company private. That’s great news for shareholders who’ve watched this mid-size midstream operator sprout taller than a teen bound for the NBA. Maybe even better news for Tallgrass and its slate of new greenfield projects and expansions. You can bet we’ll stay tuned for the latest.
What do you think?