Tallgrass to Acquire 683-Mile Ruby Pipeline, Adding 1.5 Bcf/d of Gas Capacity to Portfolio

By Mary Holcomb, Digital Editor

(P&GJ) — Tallgrass has announced an agreement to purchase the bankrupt Ruby Pipeline, a 680-mile, 42-inch-diameter natural gas pipeline built in partnership by Kinder Morgan Inc. and Pembina that runs from Wyoming to Oregon.

Tallgrass agreed to purchase the pipeline for an undisclosed amount, outbidding Kinder Morgan in a court-ordered auction held on Dec. 13.

Ruby Pipeline route from Opal, Wyoming, to Malin, Oregon. (Source: U.S. Energy Information Administration)

According to Tallgrass, the acquisition of Ruby provides access to established markets, an additional 1.5 Bcf/d of natural gas capacity to the company’s portfolio and immediate and strong cash flow to the company.

The investment will provide Tallgrass a platform to enhance natural gas service to West Coast markets. It also provides an opportunity for Tallgrass to utilize the 683-mile infrastructure network to advance its initiatives to offer decarbonized energy solutions such as responsibly sourced and renewable natural gas to customers across the U.S.

In January 2009, Ruby Pipeline LLC submitted a request to the Federal Energy Regulatory Commission (FERC) requesting permission to build and run the Ruby Pipeline Project. The application was authorized by the FERC in April 2010. The pipeline was put into service on July 28, 2011, following the start of construction on July 31, 2010.

“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,” Matt Sheehy, president and CEO of Tallgrass, said. "In addition to gaining new teammates, this acquisition further advances our track record of optimizing existing infrastructure to lead energy solutions.”

Earlier this year, Ruby Pipeline LLC filed for bankruptcy under Chapter 11 in order to reorganize more than $475 million in long-term debt. In November, Pembina agreed to pay $102 million to resolve its responsibilities for the Ruby Pipeline in an attempt to emerge from the bankruptcy.

Ruby reached an agreement with its creditors during the summer to sell its natural gas pipeline with plans to fully come out the red by January 2023.

The transaction is expected to close in the first quarter of 2023 subject to customary regulatory approvals and closing conditions.

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