Asset/portfolio management

Tallgrass Adds Ruby Pipeline to Natural Gas Assets

The infrastructure company placed the winning high bid in a bankruptcy auction.

The 683-mile, 42-in. diameter Ruby natural gas pipeline runs from Opal, Wyoming, to Malin, Oregon.

Tallgrass Energy has an agreement in place to purchase the bankrupt Ruby Pipeline for an undisclosed amount, besting rival and part Ruby owner Kinder Morgan who was also pursuing the asset. The pipeline was sold at a court-ordered auction on 13 December.

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 cash flow to the company.

The investment will provide Tallgrass a platform to boost natural gas service to West Coast markets. It also provides an opportunity for Tallgrass to utilize Ruby’s infrastructure network to offer decarbonized energy solutions such as responsibly sourced and renewable natural gas to US customers.

“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,” said Matt Sheehy, president and chief executive of Tallgrass.

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

Ruby Pipeline filed to reorganize under Chapter 11 of the bankruptcy code on 31 March in response to an upcoming debt repayment obligation. The is a 680-mile, 42-in. diameter natural gas pipeline running from Opal, Wyoming, to Malin, Oregon, and was a joint venture between Kinder Morgan and Canada’s Pembina.

Over the summer, Ruby struck a deal with its creditors that put it on course to sell its natural gas pipeline and emerge from bankruptcy by January 2023.