Health · Europa Today
Enbridge has agreed to acquire Tallgrass Energy’s crude transportation business for $2.55 billion in cash. The transaction includes a 75% interest in the 1,050-mile Pony Express Pipeline, which has capacity of roughly 460,000 barrels per day and links Rockies crude production with Cushing and around 500,000 bpd of refining capacity. Enbridge will also acquire a 51% interest in the Powder River Gateway system, which includes two pipelines with combined capacity of about 240,000 bpd, as well as approximately 8.4 million barrels of crude storage across nine terminals.
The assets give Enbridge stronger connectivity between the Bakken, Powder River Basin, and Denver-Julesburg Basin and Cushing, complementing the Canadian pipeline giant’s existing Express-Platte system. The $2.55 billion purchase price represents an estimated forward enterprise value-to-EBITDA multiple of between 10 and 11 times. The acquisition also includes the PXP2 expansion project, a roughly $300 million investment expected to lift Pony Express capacity to approximately 515,000 bpd, backed by take-or-pay contracts and expected to enter service in late 2027.
Once the transaction closes, Enbridge plans to add PXP2 to its secured growth backlog, valued at $41 billion. The deal follows Enbridge’s August acquisition of Salt Creek Midstream’s crude gathering business. An equity offering will partly finance both acquisitions, providing additional funding flexibility for future growth.
For Enbridge, the Tallgrass assets deepen its exposure to inland U.S. crude production, a key source of global supply for decades. Pony Express is heavily contracted through the remainder of the decade, ensuring long-term contracted cash flow. The company expects the acquisition to increase distributable cash flow per share in its first full year of ownership, with no material impact on its 2026 financial guidance.
Enbridge maintains its leverage target of 4.5 to 5.0 times debt-to-adjusted EBITDA and reaffirmed its medium-term target of roughly 5% compound annual growth in EBITDA, distributable cash flow per share, and earnings per share. The transaction remains subject to regulatory approvals, including U.S. antitrust clearance, and is expected to close later in 2026.
