Walking Tall - Tallgrass's Winning Strategy for the Rockies Express (REX) Pipeline
When the Rockies Express (REX) Pipeline was being planned and built a few years ago, no one could have predicted that the natural gas-hungry Northeast REX was developed to serve would soon become a gas-production behemoth able to meet its own needs and have plenty of gas left over. But that’s just what happened, and in response, REX’s owners developed a revised strategy that deals with the reality of Marcellus/Utica production growth by making more and more of REX bi-directional. Now, Tallgrass Energy Partners (TEP), a master limited partnership (MLP), has acquired a 25% interest in REX from Sempra, joining existing co-owners Tallgrass Development (an affiliate with a 50% stake in REX) and Phillips 66 (with a 25% stake), and has laid out a long-term vision for maintaining—and even increasing—REX’s relevance in a still-changing energy world. Today, we consider TEP’s $1.08 billion investment in REX, and the steps that the pipeline’s co-owners are taking to bolster REX’s future.
