Enbridge Inc. announced on September 9, 2026, that it has entered into a definitive agreement to acquire the crude oil transportation, gathering, storage, and terminaling assets of Tallgrass Energy, LP. The transaction is valued at U.S.$2.55 billion in cash, subject to customary closing adjustments, which represents an estimated acquisition multiple of 10-11x forward enterprise value to EBITDA.
Under the agreement, Enbridge will acquire 75% of the Pony Express Pipeline, a 1,050-mile system with a capacity of approximately 460 kilobars per day (kbpd) connecting Rockies production to Cushing, Oklahoma. The acquisition also includes 51% of the Powder River Gateway system, which features two crude pipelines with a combined capacity of about 240 kbpd. Additionally, Enbridge will acquire approximately 8.4 million barrels of storage capacity across nine crude terminals and Stanchion Energy, a crude marketing business.
The deal is expected to close later in 2026, contingent upon the receipt of customary regulatory approvals, including clearance from the Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Enbridge plans to partially fund the acquisition, along with a previously announced purchase of Salt Creek Midstream’s crude gathering business, through an equity offering. The company expects the acquired business to be accretive to distributable cash flow per share in the first full year of ownership and to generate significant free cash flows.
The transaction includes the Pony Express Pipeline expansion project (PXP2), a U.S.$0.3 billion initiative expected to increase capacity to approximately 515 kbpd. The expansion is underpinned by take-or-pay contracts and is anticipated to enter service in late 2027. Upon closing, PXP2 will be added to Enbridge’s $41 billion secured growth backlog.
Enbridge stated that the acquisition strengthens its position as North America’s leading crude oil transporter by providing a strategic connection between the Bakken, Powder River Basin, and Denver-Julesburg basins through Cushing. The company reaffirmed its medium-term outlook of approximately 5% compound average growth in EBITDA, distributable cash flow per share, and earnings per share, while targeting a leverage ratio of 4.5x to 5.0x Debt-to-Adjusted EBITDA.
