With the aim of better serving West Coast natural gas markets, midstreamer Tallgrass said Friday it has agreed to purchase Houston-based Ruby Pipeline LLC, which filed for Chapter 11 bankruptcy in March.
Tallgrass said the acquisition of the 1.5 Bcf/d line checks two boxes in the company’s current strategy. In addition to enhancing natural gas service to West Coast markets, it also “provides a unique opportunity” for Tallgrass to advance its initiative of decarbonized energy solutions such as responsibly sourced and renewable natural gas for customers across the U.S. Terms of the deal were not disclosed.
“Ruby’s capabilities maintain our nation’s energy security and provide long-term opportunities in the transportation of the molecules that will be required in the energy transition” said Tallgrass CEO Matt Sheehy. “In addition to gaining new teammates, this acquisition further advances our track record of optimizing existing infrastructure to lead energy solutions.”
The 680-mile, 42-inch diameter pipeline is currently jointly owned by Houston-based Kinder Morgan Inc. and Pembina Pipeline Corp. In November, Pembina entered into a settlement agreement with Ruby Pipeline that releases Pembina from any actions arising from the bankruptcy in exchange for a $102 million payment to Ruby. Under the settlement, Pembina as a creditor retains recovery rights.
The system begins at the Opal Hub in Wyoming and terminates at the Malin, OR, interconnect near California’s northern border.
Tallgrass said the transaction is expected to close in 1Q2023 subject to regulatory approvals and closing conditions.
