Under the terms of the deal, Blackstone will take a stake of 44% in Tallgrass Energy and also 100% of its general partner.

In this connection, affiliates of Blackstone Infrastructure Partners, the infrastructure investment arm of the US private equity firm, have signed an agreement with affiliates of Kelso & Co., The Energy & Minerals Group, and Tallgrass KC – which is an entity owned by some members of the midstream company’s management.

Singapore’s sovereign wealth fund GIC’s affiliates will be a minority investor in the transaction.

Tallgrass president and CEO David Dehaemers Jr. said: “Blackstone’s scale, long-term capital, and investment expertise across the energy industry make it an ideal partner for our business as we continue to create value and invest capital in accretive growth opportunities.

“We appreciate the successful partnership we have had with Kelso and EMG since 2012 and thank them for their significant support. We look forward to working with Blackstone to continue maximizing value for all stakeholders.”

Founded in 2012, Tallgrass Energy is engaged in transportation of crude oil and natural gas from the Rocky Mountains, Upper Midwest and Appalachian regions in the US. The midstream energy infrastructure company operates more than 13,357km of natural gas pipeline, more than 1,287km of crude pipeline, and more than 482km of water pipeline.

Blackstone infrastructure global head Sean Klimczak said: “Tallgrass is managed by an exceptional team that has an outstanding track record of commercial, operational and financial success.

“This transaction represents a rare opportunity to invest in a large-scale U.S. midstream infrastructure platform that connects high-production supply basins to key markets and is underpinned by long-term contracts.”

The transaction will be subject to customary closing conditions and is anticipated to be completed inside the first quarter of this year.

Last month, Tallgrass Energy signed an agreement with Kinder Morgan to combine their existing and newly constructed pipeline assets to increase their crude oil transportation from the Rockies region.