Enbridge’s acquisition of Tallgrass crude oil assets from Blackstone represents a strategic expansion into the PADD 4/Rockies oil corridor. Central to the transaction is Enbridge acquiring a 75% controlling interest in Pony Express Pipeline, a system that currently operates nearly fully utilized by moving approximately 420,000 barrels per day (bpd) to Cushing, Oklahoma and downstream refineries through its direct flows and the leased capacity entity Seahorse (see graphs below). Secondarily, the deal includes a 51% stake in the Powder River Gateway (PRG) gathering system. Moving Powder River Basin production to the key oil hub at Guernsey, PRG currently carries roughly 100,000 bpd against a stated capacity near 240,000 bpd, positioning Enbridge to capture volume upside if area production accelerates.
The true operational value of the acquisition may lie in future growth and integration including resolving historical “telescoping” bottlenecks along the Pony Express route. The system was originally assembled using distinct pipe segments: a 20-inch line from Guernsey to Northern Colorado, a 22-inch section from Northern Colorado to Northern Kansas, and a 24-inch new build finishing the run to Cushing, Oklahoma (see figure below). The initial 20-inch bottleneck was mitigated in 2021 by building a second line from Guernsey down into Northern Colorado. This bypass was made possible by leveraging leftover 24-inch pipe from the shelved Liberty Pipeline project. Following the project’s cancellation, thousands of unused 24-inch pipeline joints were left sitting in staging yards across Eastern Colorado, where vast stockpiles remain clearly visible alongside rail lines on satellite imagery to this day.
Today, the primary constraint on Pony has shifted downstream to the 22-inch segment running between Sterling, Colorado, and Natoma, Kansas. Public records, including minutes from a May 2026 Dundy County Commissioners meeting in Nebraska, reveal that Tallgrass planned to replace sections of the line with a new 24-inch pipeline in 2027. Paired with an Enbridge presentation detailing a planned 55,000-bpd expansion ("Pony Express Pipeline 2") for 2027, this suggests a possible strategy to utilize remaining Liberty pipe stockpiles to twin the critical Sterling-to-Natoma segment, debottlenecking mainline capacity.
Beyond the core Pony Express trunkline, Enbridge could benefit from integration with its broader midstream ecosystem. Assets like Enbridge’s Express Pipeline present potential future strategic optionality: while full at the Canadian U.S. border, Express offloads significant crude volumes to Montana refineries, leaving substantial latent capacity along the stretch between Billings and Casper. Future projects could utilize this latent capacity in order to move additional crude from Canada into U.S. markets.
