Tallgrass Development has announced that its wholly owned subsidiary, Rockies Express Holdings, LLC, has signed a purchase agreement with Sempra U.S. Gas & Power, to acquire Sempra's 25 percent interest in the Rockies Express Pipeline (REX) for approximately $440 million in cash.

Tallgrass's President and CEO David G. Dehaemers, Jr. said "since 2012 our team has believed in REX's significance to natural gas transportation in America, and over the past three and a half years we have executed on the strategy to solidify the pipeline'€™s prominence and value for the long-term."

For its part, Patti Wagner, President and CEO of Sempra U.S. Gas & Power, noted that "after careful evaluation of our natural gas portfolio, we determined that our minority stake in REX is not consistent with our long-term growth strategy. While REX is an important part of the country's natural gas pipeline system, we believe that given the changing market conditions, we can more productively redeploy the proceeds from the REX sale into long-term growth opportunities that better meet our strategy and risk profile."

The transaction is subject to customary closing conditions and a right of first refusal. Sempra Energy expects the transaction to close in the second quarter and result in an after-tax loss of approximately $27 million.