CPP Investments Allots $843MM to Tallgrass Energy

Canada Pension Plan Investment Board (CPP Investments) is investing approximately $843 million (CAD 1.2 billion) in Denver, Colorado-based Tallgrass Energy.

Tallgrass is a leading infrastructure company operating a network of more than 10,000 miles of pipeline assets across 14 states in the USA. The company is currently engaged in several initiatives aligned with the global transition to a lower-carbon future, including the development of carbon dioxide (CO2), hydrogen, renewable fuels, and decarbonized power assets.

“With a business strategy that combines traditional energy and decarbonization solutions, Tallgrass is an attractive investment opportunity because of its dual role in delivering against growing energy needs and increasing decarbonization opportunities,” Bill Rogers, Managing Director, Global Head of Sustainable Energies at CPP Investments, said in a news release. “We are excited to partner with Blackstone and combine our investment and energy expertise to help support the Tallgrass team”.

Matthew Runkle, Senior Managing Director and Head of Renewables and Midstream within the Infrastructure Group at Blackstone, said, “Over the last five years, we have worked closely with Matt Sheehy and the Tallgrass management team to develop and operate industry-defining large-scale energy infrastructure. We are delighted to welcome our long-term partner, CPP Investments, as a new investor in Tallgrass, combining our resources to support Tallgrass for continued growth”.

In June, integrated downstream company Phillips 66 announced the divestment of its 25 percent non-operated common equity interest in Rockies Express Pipeline LLC (REX) to a subsidiary of Tallgrass Energy LP (TGE) for an enterprise value of approximately $1.275 billion.

TGE is the operator of REX and will own 100% of the common equity interest in REX following the transaction, Phillips 66 said in an earlier news release.

REX, a 1,714-mile pipeline system, is one of the largest natural gas pipelines in the USA and provides over 5 billion cubic feet per day of bi-directional natural gas transportation service between the Rockies, Appalachia and the northeastern United States, according to the release.

The natural gas pipeline system spans from Rio Blanco County, Colorado, to Monroe County, Ohio. REX became fully operational in November 2009 with a capacity of 1.8 billion cubic feet per day. REX offers firm and interruptible transportation services as well as pooling, wheeling and a park and loan service, according to the TGE website. Tallgrass NatGas Operator, LLC operates Rockies Express.

CPP Investments’ Sustainable Energies group is active across the global energy system, with investments in renewables, conventional energy, carbon capture and storage, distributed and energy services, and emerging and disruptive technologies.

CPP Investments is a professional investment management organization that manages the fund in the best interest of the more than 22 million contributors and beneficiaries of the Canada Pension Plan.

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