Ruby Pipeline

Tallgrass Energy last month snagged an early Christmas present: It won a bid for Ruby Pipeline, the beleaguered Rockies-to-West Coast natural gas system that has long been underutilized and cash-poor. In doing so, it beat out one of the largest midstream companies in North America and a long-time co-owner of Ruby — Kinder Morgan. Ruby may be a languishing asset, but for Tallgrass it’s more like a crown jewel in its quest to be the only transcontinental header system in the country that would connect trapped Appalachian gas supply with premium West Coast markets. Tallgrass’s Rockies Express (REX) pipeline is already moving Marcellus/Utica molecules west to the Rockies — the opposite direction than it was originally built for in the pre-Shale Era. The Ruby acquisition, which has yet to close, would allow Tallgrass to extend its reach farther west, directly into the premium West Coast markets. The Ruby deal comes at a time when California’s aggressive decarbonization goals are leading to gas shortages and exorbitant fuel premiums out west, and there’s an immediate need to debottleneck routes to get gas there. In today’s RBN blog, we begin a series delving into how Ruby fits into the Western U.S. gas market and what the acquisition would mean for Tallgrass.

The recently announced acquisition of Questar Pipeline LLC by Southwest Gas has stirred up a hornet’s nest. Southwest sees it as a milestone moment that will allow it an increased role in the energy transition, but activist investor Carl Icahn sees it as a serious blunder that would make all previous management missteps pale in comparison. As Dave Mason sang in “We Just Disagree,” a dispute over value is at the heart of the matter, one which has led to a proxy fight, a tender offer for Southwest Gas, and a lot of harsh words. In today’s RBN blog, we take a closer look at Questar’s natural gas pipelines and other assets, the roles they play in relation to the Rockies’ other pipelines, and how it all factors into Questar’s perceived value.

Billionaire Warren Buffett tried to buy it but later bowed out. Billionaire Carl Icahn thinks buying it is a dumb idea — and has launched a tender offer and proxy fight to stop it. The long and winding road leading Southwest Gas Holdings to its planned $1.975 billion acquisition of Questar Pipeline from Dominion Energy started more than a year ago and touches on a number of hot-button topics in today’s energy industry: the divestiture of natural gas assets, the ongoing energy transition, concerns about antitrust regulations, activist investors, and infrastructure. In today’s RBN blog, we look at the sale itself, the current state of natural gas production and pipelines in the Rocky Mountains, and how that gas fits into the nationwide picture.

This spring, TransCanada launched service for its 230-MMcf/d Sundre Crossover expansion, increasing transportation capacity for moving Alberta natural gas production to the U.S. Pacific Northwest. That may seem like a trifling volume in the big scheme of the North American gas market. But considering that Canadian and U.S. producers already are locked in a heated battle for market share of U.S. demand and pipeline capacity, it’s enough for Canadian supply to gain ground. Since the Sundre in-service date, deliveries to the Kingsgate point at the British Columbia-Idaho border have ratcheted up to the highest levels in at least a decade. As a result, Canadian exports have managed to elbow out Rockies gas from the California market, and set off a ripple effect that’s pushing more gas east to the Midcontinent. Today, we examine the shifting gas flows in the West.