Tallgrass Energy Partners acquires Powder River oil gathering system
Tallgrass Energy Partners, LP announced Monday that it acquired, through its subsidiary Tallgrass Midstream, LLC (TMID), Outrigger Energy LLC’s crude oil gathering system in the Powder River Basin
for approximately $36 million.
The sale is subject to potential adjustments specified in the purchase agreement.
The acquisition includes approximately 34 miles of gathering lines and approximately 150,000 acres on a long-term fee-based contract.
Tallgrass estimates additional capital expenditures of approximately $7 million for the remainder of 2017 on the Outrigger system.
Tallgrass Interstate Gas Transmission, LLC (TIGT) announced that, as a result of the acquisition, it intends to abandon by sale to TMID an underutilized segment of its system that stretches from Labonte, to Guernsey, Wyoming. The abandonment is subject to approval by the Federal Energy Regulatory Commission (FERC).
TMID will convert the pipeline segment into crude oil service and build the facilities needed for a new crude oil line from Labonte to the Outrigger system, as well as additional laterals into other producing areas in the Powder River Basin. This will provide direct access for producers on the Outrigger system to Tallgrass Pony Express Pipeline, LLC’s crude oil pipeline system.
“This is another strategic acquisition that complements our existing processing, natural gas gathering, transportation and water assets in the region and enables us to provide additional services for producers in the basin,” Tallgrass CEO Bill Moler said. “With the early, but very encouraging, well results from producers, the Powder River Basin is a strategic focus for Tallgrass. This acquisition expands our footprint in the region and provides another direct supply source for Pony Express.”
