Tallgrass acquires Powder River Basin pipelines

Kansas-based Tallgrass Energy Partners has closed on the $36 million purchase of a crude oil-gathering pipeline system in the Powder River Basin in Wyoming from Outrigger Energy, Kallanish Energy reports.

The purchase was completed through Tallgrass Energy Partners’ Tallgrass Midstream subsidiary.

“This is another strategic acquisition that complements our existing processing, natural gas gathering, transportation and water assets in the region and enable us to provide additional services for producers in the basin,” said Tallgrass chief operating officer Bill Moler, in a statement..

He called the Powder River Basin “a strategic focus for Tallgrass.”

The acquired assets include about 34 miles of gathering lines and roughly 150,000 acres dedicated on a long-term fee-based contract.

Tallgrass said it will likely cost roughly $7 million through the rest of 2017 to complete the remainder of the Outrigger pipeline system.

As a result of the deal, Tallgrass Interstate Gas Transmission intends to abandon by sale to TMID an under-utilized segment of its system from Labonte to Guernsey in Wyoming. The abandonment must be approved by the Federal Energy Regulatory Commission.

It will have no impact on TIGT’s transportation customers, and that line will be converted to crude oil, the company said.

It intends to also add new crude oil lines from Labonte to the Outrigger system. It will also add oil laterals into other producing areas in the Powder River Basin and will provide access to the Tallgrass Pony Express Pipeline.