Tallgrass to acquire Ruby Pipeline from Chapter 11
US midstream infrastructure company Tallgrass said December 16 it had reached an agreement to acquire Houston-based Ruby Pipeline, which has been under Chapter 11 bankruptcy protection since March.
The transaction, the value of which was not disclosed, is expected to close in Q1 2023, subject to customary regulatory approvals and closing conditions.
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Ruby is a 1.5bn ft3/day, 680-mile pipeline between Opal, Wyoming and Malin, Oregon. It was placed under bankruptcy protection by its joint venture owners, Kinder Morgan and Canada’s Pembina Pipeline, in March.
In November, Pembina Pipeline said it had reached a settlement agreement with Ruby that provided for the release of Pembina from any causes of action that might arise from the bankruptcy proceeding. Pembina agreed to a US$102mn payment to Ruby but retains all its recovery rights as a creditor.
Ruby, Tallgrass said, offers a “unique opportunity” to advance its initiatives to offer decarbonised energy solutions such as responsibly sourced and renewable natural gas to customers across the US.
“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,” Tallgrass CEO Matt Sheehy said. “In addition to gaining new teammates, this acquisition further advances our track record of optimising existing infrastructure to lead energy solutions.”