Tallgrass Energy Partners LP acquired an additional 24.99% membership stake in Rockies Express Pipeline LLC from Tallgrass Development LP for $400 million.
The deal boosts Tallgrass Energy Partners' ownership in the 1,698-mile, bidirectional natural gas pipeline to about 50%, according to an April 3 news release.
The partnership plans to recommend a quarterly distribution increase for the second and third quarter of 2017 by an aggregate of at least 10 cents per unit, or 40 cents per unit annualized, according to President and CEO David Dehaemers Jr.
Rockies Express recently completed REX Zone 3, a 0.8 Bcf/d expansion project that allows for additional bidirectional east-to-west gas transportation service expected to ease bottlenecks in Appalachia.
In addition, the U.S. Bankruptcy Court confirmed Ultra Resources Inc.'s Chapter 11 reorganization plan, which includes payment of a $150 million claim to Rockies Express, to be made within three months after Ultra emerges from bankruptcy or before Oct. 30. Tallgrass Energy Partners stands to receive about 50% of a $150 million distribution from Rockies Express from Ultra's settlement. Ultra expects to emerge from bankruptcy in April.