Tallgrass Energy Partners LP (NYSE: TEP) announced Sept. 8 it closed on the acquisition of a 33.3% interest in Tallgrass Pony Express Pipeline LLC through a dropdown from a subsidiary of Tallgrass Development LP for $600 million.

Pony Express owns and is developing an oil pipeline project. That project consists of two components that include the conversion of a 430-mile natural gas pipeline and the construction of an estimated 260-mile southward pipeline extension that, when complete, will result in an oil pipeline from Guernsey, Wyo., to Cushing, Okla. Secondly, the project is comprised of the construction of an estimated 66-mile lateral in Northeast Colorado that will interconnect with the mainline.

The Pony mainline has roughly 206,000 barrels per day (bbl/d) of committed capacity with five year contract terms and is expected to be in service during the third quarter of 2014. The Northeast Colorado lateral has nearly 81,000 bbl/d of committed capacity with five year contract terms and is expected to be in service sometime during the first half of 2015. The firm contracts commence on the date the Pony Mainline or Northeast Colorado Lateral, as applicable, are placed in commercial service.

“We are pleased to announce the completion of our second dropdown transaction at TEP. This acquisition further diversifies the operations and footprint of TEP and continues to demonstrate the execution of our growth strategy. We expect this acquisition to be immediately accretive to our unitholders, and as a result, anticipate recommending that our board of directors increase the next two quarterly distributions to result in an aggregate distribution increase of at least $0.40 on an annualized basis,” said David G. Dehaemers Jr., Tallgrass president and CEO, in a statement.