Tallgrass announces potential acquisition of additional 33.3% interest in Pony Express Pipeline

Tallgrass Energy Partners, LP (TEP) has announced that Tallgrass Development, LP has offered TEP the right to purchase a 33.3% interest in Tallgrass Pony Express Pipeline, LLC. If consummated, this would increase TEP’s ownership interest in Pony Express to 66.7%. Terms of the offer have not been finalised and may be modified upon completion of the ongoing open seasons for the expansion of the Pony Express crude oil pipeline system. In conjunction with the proposed transaction, the parties expect to seek clearance from the Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act.

Pony Express owns an approximately 690-mile crude oil pipeline commencing in Guernsey, Wyoming, and terminating in Cushing, Oklahoma, with delivery points at the Ponca City Refinery and at Deeprock in Cushing. Upon completion of ongoing construction, Pony Express also will own an approximately 66-mile lateral in Northeast Colorado that will commence in Weld County, Colorado, and interconnect with the Pony Express mainline just east of Sterling, Colorado. The lateral in Northeast Colorado is expected to be in service sometime during the first half of 2015. Pony Express is currently undergoing open seasons to solicit commitments for incremental crude oil transportation service expected to be operational in the second half of 2016, with interim capacity of approximately 100 000 bpd available beginning in mid-2015.

The offer was received from Tallgrass Development pursuant to a right of first offer that is contained in the Omnibus Agreement executed between TEP and Tallgrass Development in connection with TEP’s initial public offering in May 2013. A Conflicts Committee of the Board of Directors of TEP’s general partner, consisting solely of independent directors, has been formed to evaluate the offer with assistance from external advisors to be engaged by the Committee. No definitive transaction agreement has been executed at this time and the proposed transaction remains subject to review, negotiations and approval by the Conflicts Committee and by the board of directors of TEP’s general partner.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/contracts-and-tenders/09012015/tallgrass-announces-potential-acquisition-of-additional-333-percent-interest-in-pony-express-pipeline-26/