Pony Express Pipeline, Powder River Gateway system connect U.S. Rockies crude producers to Cushing hub
Enbridge has just acquired a slice of the Rocky Mountain pie.
To date, Enbridge—which owns and operates North America’s longest and most complex crude oil pipeline transportation network—has served major production activity in the Permian, Western Canada Sedimentary Basin (WCSB), Bakken and Eagle Ford regions.
You can now expand the U.S. Rocky Mountains on that list in a big way, after today’s announcement that we are acquiring Tallgrass Energy’s crude oil transportation, gathering, storage and terminaling assets for US$2.55 billion.
That means connecting with producers in the Rockies—specifically, those working in the Powder River Basin (PRB) and the Denver-Julesburg (DJ) Basins, which together stretch from southern Montana through Wyoming to Colorado, Nebraska and Kansas.
“This acquisition strengthens Enbridge’s position as North America’s leading crude oil transporter and expands its footprint into the U.S. Rockies region,” notes Enbridge’s Colin Gruending, Executive Vice President and President of our Liquids Pipelines business.
As part of today’s agreement, Enbridge will acquire:
- A 75% interest in the 1,050-mile (1,690-km) Pony Express Pipeline, which travels from Guernsey, WY and multiple locations in Colorado to Cushing, OK, with an approximate 460,000 barrels-per-day (bpd) average annual capacity and direct access to about 500,000 bpd of refining capacity,
- A 51% interest in the Powder River Gateway system, which comprises two lines (the 80-mile Iron Horse Pipeline and the 70-mile Powder River Express Pipeline) with combined capacity of about 240,000 bpd, connecting the PRB to the Pony Express pipeline.
- About 8.4 million barrels of storage capacity across nine terminals connected into Pony Express, which includes a 60.3% non-operating interest in the Deeprock Crude Terminal in Cushing, OK.
- Stanchion Energy, a crude marketing business which drives incremental throughput and optimizes value of the other acquired assets.
“The Pony Express system is a premier crude oil corridor connecting some of North America's most productive basins with key refining and market centers,” says Mr. Gruending.
Pony Express is highly contracted throughout the decade with predominantly investment-grade counterparties. Available takeaway capacity from the DJ/PRB remains closely aligned with expected basin production, supporting utilization and contract renewal expectations.
Related to today’s announcement, Enbridge will also assume the PXP2 project, a US$0.3-billion expansion of Pony Express which is expected to increase capacity to 515,000 bpd and enter service in late 2027.
The acquisition complements Enbridge's existing Express-Platte system, which transports crude from Hardisty, AB to Wood River, IL via Montana, Wyoming, Nebraska, Kansas and Missouri.
Enbridge expects this acquisition to generate significant free cash flows, provide future growth opportunities and create opportunities for operational synergies over time across its broader liquids pipeline network.
The acquisition, which represents an estimated acquisition multiple of 10-11x forward enterprise value to EBITDA, is expected to close later in 2026.
“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,” notes Mr. Gruending.
