LEAWOOD, Kan.--(BUSINESS WIRE)--Tallgrass Development, LP (“Tallgrass”) announced today that its wholly owned subsidiary, Rockies Express Holdings, LLC, has signed a purchase agreement with a unit of Sempra U.S. Gas and Power (“Sempra”) to acquire Sempra's 25 percent membership interest in Rockies Express Pipeline LLC (“REX”) for cash consideration of $440 million, subject to adjustment under the purchase agreement. “Since 2012 our team has believed in REX’s significance to natural gas transportation in America, and over the past three and a half years we have executed on the strategy to solidify the pipeline’s prominence and value for the long-term,” said Tallgrass’s President and CEO David G. Dehaemers, Jr. “Tallgrass is very pleased to have the opportunity to purchase an additional interest in REX as we continue to operate the pipeline and transform it into the northern-most, bi-directional natural gas header system in the United States.”
The transaction has been approved by the applicable boards of both Tallgrass and Sempra and is subject to closing conditions. In addition, the other member of REX, which owns a 25 percent membership interest, has a right to purchase its proportionate share of Sempra's 25 percent membership interest being sold to Tallgrass, which could reduce the membership interest acquired by Tallgrass from Sempra to 16 2/3 percent. Tallgrass expects the transaction to close in the second quarter of 2016.
About Tallgrass Development
Tallgrass Development, LP, a private limited partnership organized in Delaware, currently owns a 50 percent membership interest in and operates the Rockies Express Pipeline, an approximately 1,712 mile natural gas pipeline which enables producers in the Rocky Mountain and Appalachian Basin production regions to deliver gas to the Midwest and eastern parts of the country. Tallgrass Development also owns Tallgrass Terminals, which owns crude oil terminal facilities near Sterling, Colorado and owns an interest in the Deeprock Cushing crude oil terminal. Further, Tallgrass Development owns a 2 percent minority ownership interest in Tallgrass Pony Express Pipeline, which is a crude oil pipeline commencing in Guernsey, Wyoming and terminating in Cushing, Oklahoma that includes a lateral in northeast Colorado that commences in Weld County, Colorado, and interconnects with the pipeline just east of Sterling, Colorado. In addition, Tallgrass Development currently owns 12,873,480 common units in Tallgrass Energy Partners, LP.
The general partner of Tallgrass Development also indirectly controls the general partner of Tallgrass Energy GP, LP (NYSE: TEGP) and the general partner of Tallgrass Energy Partners, LP (NYSE: TEP). To learn more, please visit our website at www.tallgrassenergy.com.
This press release includes “forward-looking statements.” All statements, other than statements of historical facts, included in this press release that address activities, events or developments that are expected, believed or anticipated will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the anticipated closing of the acquisition of an additional 25 percent membership interest in REX from a subsidiary of Sempra. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Tallgrass, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Any forward-looking statement applies only as of the date on which such statement is made. Tallgrass disclaims any obligation to revise or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.