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Canada Pension Plan Investing $843M in Tallgrass Energy, REX

We spotted some news that, on the surface, may not appear to be connected to the Marcellus/Utica, but we think it is. The Canada Pension Plan Investment Board (CPP Investments) is investing approximately $843 million (CAD 1.2 billion) in Denver, Colorado-based Tallgrass Energy. CPP is a major investor in the Utica Shale (via Encino Energy), and Tallgrass is the owner and operator of the Rockies Express (REX) pipeline that flows Marcellus/Utica gas to the Midwest.
Read More “Canada Pension Plan Investing $843M in Tallgrass Energy, REX”

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Owner of 3 Athens, OH Injection Wells Applies to Permanently Plug

In April, the Ohio Oil and Gas Commission upheld a regulatory order from the Ohio Dept. of Natural Resources (ODNR) suspending operations of three wastewater injection wells located in Torch (Athens County), OH, owned by K&H Partners, a subsidiary of Tallgrass Energy (see Ohio O&G Commission Votes to Shut Down 3 Athens Injection Wells). The Athens County Independent is reporting K&H is officially throwing in the towel and has applied to plug its three Torch injection wells.
Read More “Owner of 3 Athens, OH Injection Wells Applies to Permanently Plug”

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Phillips 66 Sells 25% Share in Rockies Express Pipe to Tallgrass

Tallgrass Energy, majority owner of the Rockies East Express (REX) pipeline — a 1,712-mile pipeline that runs from Colorado and Wyoming to Ohio — has owned 75% of REX since buying out a 25% share from Sempra Energy in 2016 for $440 million (see Tallgrass Buys Out Sempra’s Portion of REX Pipeline for $440M). Refiner Phillips 66 is the owner of the other 25% of REX. On Friday, Phillips 66 announced it was selling its share to Tallgrass for $1.275 billion.
Read More “Phillips 66 Sells 25% Share in Rockies Express Pipe to Tallgrass”

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Stagecoach, Transco, Other Pipelines Face Expiring Contracts 2Q22

When a pipeline company considers whether or not to build a new pipeline, the company conducts an “open season”–a time when drillers (producers), traders, buyers, and others who want guaranteed capacity along that pipeline can sign long-term contracts. Such contracts guarantee pipeline companies will be able to make back the considerable amount of money they have to spend to build the pipeline. What happens when those 5-, 10-, and 20-year contracts expire?
Read More “Stagecoach, Transco, Other Pipelines Face Expiring Contracts 2Q22”

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Driller Wins Right to Cancel Pipeline Contract via Bankruptcy

If an upstream (drilling) company with a long-term pipeline contract files for bankruptcy, does that give the company the right to break its pipeline contract? A major shipper on the Rockies Express (REX) pipeline, Ultra Resources, filed for bankruptcy with the express plan to skip out on its obligations to REX (see REX Pipe Asks FERC to Prevent Shipper from Breaking Contract). The Federal Energy Regulatory Commission (FERC) stepped in to say it (FERC) has jurisdiction to decide whether or not Ultra (and by extension, other companies) can wiggle out of their contracts via bankruptcy. The U.S. Court of Appeals for the Fifth Circuit recently ruled that FERC does not have the lead in such cases–that a decision about breaking a pipeline contract will be up to the bankruptcy court instead. This is bad news for pipeline builders.
Read More “Driller Wins Right to Cancel Pipeline Contract via Bankruptcy”

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More on EQT’s Deal to Sell Capacity on MVP, Increase REX

Last week MDN told you the news that EQT Corporation has sold part of its reserve capacity along the Mountain Valley Pipeline (MVP) to “an undisclosed investment-grade entity for six years” (see Divorce: EQT Sells 1/2 Bcf/d of Capacity on Mountain Valley Pipe). EQT also announced an increase in its capacity along the Rockies Express (REX) pipeline to carry more of its gas to Midwestern markets. The news about MVP is not quite as simple as it seems. EQT did NOT give up sending 1/2 a Bcf of its gas along MVP as it may first appear. We need to go deeper…
Read More “More on EQT’s Deal to Sell Capacity on MVP, Increase REX”

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REX to Become 1st Pipeline to Flow NatGas with “Responsible” Label

Everyone wants to be perceived as “responsible” these days, as in “responsibly sourced gas.” How to do it? Project Canary is a Denver-based firm that developed its own methane measurement technology and third-party verification called TrustWell™. A number of Marcellus/Utica drillers, including EQT, Chesapeake Energy, Southwestern Energy, Range Resources, and Seneca Resources have all joined the Project Canary program. Tallgrass Energy’s Rockies Express (REX) Pipeline aims to be the first interstate pipeline system that is Project Canary certified end-to-end, flowing Marcellus/Utica gas responsibly.
Read More “REX to Become 1st Pipeline to Flow NatGas with “Responsible” Label”

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REX Pipe Asks FERC to Prevent Shipper from Breaking Contract

If an upstream (drilling) company with a long-term pipeline contract files for bankruptcy, does that give the company the right to break their pipeline contract? A major shipper on the Rockies Express (REX) pipeline, Ultra Resources, is expected to file for bankruptcy very soon. REX is concerned Ultra may claim its bankruptcy is a “get-out-of-the-contract free” card. REX has asked FERC to preemptively “assert its jurisdiction” as the arbiter of whether or not companies like Ultra can skip out of contracts.
Read More “REX Pipe Asks FERC to Prevent Shipper from Breaking Contract”

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Blackstone Takes Over Tallgrass Energy, Stock Stops Public Trading

Last December MDN told you that investment firm Blackstone Infrastructure Partners, a major investor in pipeline company Tallgrass Energy, pursued and caught the company, tentatively convincing Tallgrass to sell its public shares of stock to Blackstone, which will take the company “private” –meaning no publicly traded shares of stock (see With Tallgrass Founder/CEO Gone, Blackstone Forces Sale/Merger). We incorrectly implied Blackstone had forced out founder and CEO David Dehaemers. It seems it was Dehaemers’ desire to cash in his chips and retire. The sale of the company was amicable and not forced. At any rate, last Thursday company shareholders voted to approve the deal and as of Friday, Tallgrass stock no longer trades on the New York Stock Exchange.
Read More “Blackstone Takes Over Tallgrass Energy, Stock Stops Public Trading”

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OH Supreme Court Rules REX Pipe Owes $2M in Excise Tax

The Ohio Supreme Court ruled yesterday that the Ohio tax commissioner correctly charged Tallgrass Energy’s Rockie Express (REX) pipeline $2 million in excise tax (based on $699 million of income), for gas transported from and to (within) Ohio. REX claimed it did not owe the tax because the same law that exempts gas transported out of state applies to gas sales in-state. But the tax commission, and now the Supremes, say that the portion of gas transported through REX that stays in Ohio is not exempt and can be taxed. So pay up.
Read More “OH Supreme Court Rules REX Pipe Owes $2M in Excise Tax”

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More Changes at the Top for Tallgrass – New CFO

In December, Blackstone Infrastructure Partners, a major energy investment firm, announced it had cut a deal to buy the remaining shares of stock it doesn’t already own in Tallgrass Energy for $3 billion, with a plan to take the company private (see With Tallgrass Founder/CEO Gone, Blackstone Forces Sale/Merger). As we previously pointed out, Tallgrass Founder and CEO David G. Dehaemers Jr. has cashed in his chips and retired, clearing the way for William R. (Bill) Moler to take over as CEO. We now have a second high-level change in the company–a new Chief Financial Officer.
Read More “More Changes at the Top for Tallgrass – New CFO”

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With Tallgrass Founder/CEO Gone, Blackstone Forces Sale/Merger

Several weeks ago the founder and CEO of Tallgrass Energy, David G. Dehaemers Jr., abruptly quit the company retired (see Tallgrass Energy Founder/CEO/Chairman David Dehaemers Retires). Blackstone Infrastructure Partners, a major Tallgrass investor, wants to buy the company and take it private. That is, a takeover. Dehaemers was not happy but couldn’t prevent it, so he left. With Dehaemers out of the way, Blackstone sealed the deal. [Correction: MDN was contacted by Tallgrass to set the record straight. David Dehaemers telegraphed back in January he would likely not remain with the company after 2019. This was, indeed, a retirement and he was not (as MDN had implied) forced out. We regret the error and send our apologies to Tallgrass.] Yesterday Tallgrass issued a statement to say Blackstone, using its own considerable pile of cash along with money from several others, has signed a deal to buy Tallgrass.
Read More “With Tallgrass Founder/CEO Gone, Blackstone Forces Sale/Merger”

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More Changes at Tallgrass Energy Following Founder’s Exit

Matt Sheehy, new President of Tallgrass Energy

Major changes continue at Tallgrass Energy, the owner/operator of the Rockies Express (REX) natgas pipeline that carries Marcellus/Utica gas to Midwest markets including the Chicago area. Last week we told you the founder/CEO of Tallgrass, David G. Dehaemers Jr., abruptly quit (see Tallgrass Energy Founder/CEO/Chairman David Dehaemers Quits). The company’s President and COO, Bill Moler, was elevated to CEO. Today Tallgrass named a new replacement in the role of President.
Read More “More Changes at Tallgrass Energy Following Founder’s Exit”

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Tallgrass Energy Founder/CEO/Chairman David Dehaemers Retires

David G. Dehaemers Jr.

Tallgrass Energy, founded in 2012, owns and operates more than 8,300 miles of natural gas pipelines, more than 800 miles of crude pipelines, and more than 300 miles of water pipelines across a broad portion of the U.S. Tallgrass is the owner/operator of the Rockies Express (REX) natgas pipeline that carries Marcellus/Utica gas to Midwest markets including the Chicago area. The founder of Tallgrass, David G. Dehaemers Jr. (still a relatively young man) is “retiring” and “stepping down as CEO” effective immediately. What happened?
Read More “Tallgrass Energy Founder/CEO/Chairman David Dehaemers Retires”

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St. Louis Marcellus/Utica Pipeline Ready to Flow Nov. 15

In February 2017, Spire, a natural gas utility company based in St. Louis, Missouri, filed an official application with the Federal Energy Regulatory Commission (FERC) to build the Spire STL Pipeline, a 65-mile, 24-inch diameter pipe that will flow 400 million cubic feet (MMcf) per day of yummy Marcellus/Utica gas from the Rockies Express (REX) pipeline to St. Louis (see Spire Files Plan with FERC to Flow Marcellus/Utica Gas to St. Louis). Construction on the project began this past December (see St. Louis Marcellus/Utica Pipeline Begins Construction).
Read More “St. Louis Marcellus/Utica Pipeline Ready to Flow Nov. 15”

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Blackstone Floats $3B Offer to Buy Rest of Tallgrass Energy

Back in January Tallgrass Energy, builder and operator of the mighty Rockies Express (REX) pipeline which is a critical link that flows Marcellus/Utica gas to Midwestern markets, dropped the bombshell announcement that investment firm Blackstone was buying a “controlling” interest in the company (see Blackstone Buys Controlling Interest in Tallgrass Energy). Blackstone now wants to buy the rest of the shares they don’t already own–and take Tallgrass private.
Read More “Blackstone Floats $3B Offer to Buy Rest of Tallgrass Energy”