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Canada's Enbridge to Acquire Tallgrass's Oil Logistics Assets for $2.55 Billion

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Canada's Enbridge (ENB) will acquire the crude oil logistics operations of Tallgrass Energy for $2.55 billion, it said in an regulatory filing and news release on Wednesday, a deal it expects will deliver synergies, free cash flow and growth potential.

In a form 8-K, Enbridge said that it had entered into a definitive agreement to acquire the oil transportation, gathering, storage and terminal assets of Tallgrass.

In a separate news release, the company said the deal will give it a 75% stake in the 1,050 mile Pony Express, 460,000 barrel-per-day pipeline connecting the Rockies to Cushing, with access to 500,000 bpd of refining capacity.

The deal will also grant it a 51% stake in the Powder River Gateway system that includes two crude pipelines that can deliver a combined 240,000 bpd.

It will also gain 8.4 million barrels of crude storage capacity actress nine terminals connected to Pony Express and a 60.3% non-operating interest in Deeprock Crude Terminal in Cushing, it said.

It will also take on crude marketing business Stanchion Energy to further boost throughput and add value to the other acquired assets, the statement said.

"Enbridge believes that [US] crude oil production will continue to play a critical role in meeting global energy demand for decades and this transaction further positions the company to lead this mission," the company's statement said.

"Specifically, this acquisition provides Enbridge with a strategic connection between the Bakken, Powder River Basin (PRB) and Denver-Julesburg (DJ) basins through Cushing and complements Enbridge's existing Express-Platte system."

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