Another Rockies crude cheque while Line 5 is still down
Enbridge Inc. (TSX: ENB, NYSE: ENB) announced September 9 it entered a definitive agreement to acquire Tallgrass Energy's crude oil business for US$2.55 billion in cash, subject to customary closing adjustments. Enbridge estimates the price at 10 to 11 times forward enterprise value to EBITDA.
The package includes a 75 percent interest in the Pony Express Pipeline, a 1,050-mile system with roughly 460,000 barrels per day of capacity connecting Rockies production to Cushing, Oklahoma; a 51 percent interest in the Powder River Gateway system with about 240,000 barrels per day of combined capacity; roughly 8.4 million barrels of storage across nine crude terminals; and Stanchion Energy, a crude marketing business.
Colin Gruending, president of Enbridge Liquids Pipelines, said the deal strengthens Enbridge's position as North America's leading crude oil transporter and expands its footprint into the U.S. Rockies. The acquisition includes the PXP2 expansion project, a US$300 million Pony Express capacity increase to about 515,000 barrels per day expected in late 2027 under take-or-pay contracts.
Enbridge said the deal is expected to be accretive to distributable cash flow per share in the first full year of ownership. An equity offering will partially fund this acquisition, the August 26 Salt Creek Midstream crude gathering purchase, and future growth. Close is expected later in 2026, subject to Hart-Scott-Rodino clearance and other customary conditions. 2026 financial guidance is not materially impacted given expected timing.
Neutral read
ENB is on the listed pipeline list. Banks were skipped. US$2.55 billion and Pony Express are the facts. Write this as U.S. liquids expansion, not as a Canadian heavy-oil spread call. Watch equity issuance size, FTC review timing, and whether PXP2 actually lands in the $41 billion secured backlog on close.