Tallgrass Energy raises stake in crude pipeline in $743.6 million deal

(Reuters) - Tallgrass Energy Partners LP said it would buy an additional 31.3 percent stake in Tallgrass Pony Express Pipeline LLC for about $743.6 million from Tallgrass Development LP.

Tallgrass Energy Partners will pay $475 million in cash and 6.52 million in common units to Tallgrass Development.

With the deal, Tallgrass Energy Partners’ stake in the 760-mile long crude pipeline increases to 98 percent from 66.7 percent.

Tallgrass Energy Partners also raised its quarterly dividend by 6.7 percent to $0.64 per common unit for the fourth quarter.

The Pony Express Pipeline, which runs from Guernsey, Wyoming, to Cushing, Oklahoma, can transport 320,000 barrels of oil per day.

The pipeline links major oil plays such as Bakken, Powder River Basin and Niobrara Shale with markets across the United States.

Tallgrass Energy Partners and Tallgrass Development are controlled by Tallgrass Energy, which provides natural gas transportation and storage services.

Reporting by Anet Josline Pinto in Bengaluru; Editing by Saumyadeb Chakrabarty