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Ruby Pipeline Files for Bankruptcy

Ruby Pipeline LLC filed to reorganize under chapter 11 of the Bankruptcy Code on March […]

Ruby Pipeline LLC filed to reorganize under chapter 11 of the Bankruptcy Code on March 31 in response to an upcoming debt repayment obligation.

Earlier in the week, the company announced it had executed confidentiality agreements with shareholders concerning a potential restructuring of Ruby’s capital structure.

The Ruby Pipeline is a 680-mile, 42-in. natural gas pipeline from Opal, Wyoming, to Malin, Oregon. The pipeline is a joint venture between Kinder Morgan Inc. and Pembina Pipeline Corp. In recent months, the joint venture owners have been working with Ruby’s bondholders in an effort to work out a mutually satisfactory resolution, according to a company statement. While those efforts will continue, Ruby’s current financial condition necessitates this filing.

Kinder Morgan will continue to operate the pipeline as chapter 11 permits daily operations to continue. Ruby’s customers should notice no difference in its operations.

The company announced it will continue to keep Ruby’s customers and other stakeholders informed of developments relating to Ruby’s reorganization process. The voluntary petition was filed in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The case number is 22-10278. Additional information regarding Ruby’s petition and claim procedures is available through the following website: https://cases.primeclerk.com/rubypipeline.

On March 25, Ruby executed confidentiality agreements with members of an ad hoc group of holders of more than 70 percent of the 6 percent notes due 2022 issued by Ruby. The agreements facilitated discussions among certain affiliates of Ruby and the ad hoc group concerning a potential restructuring of Ruby’s capital structure.

According to the confidentiality agreements, “Ruby agreed that, upon the occurrence of certain events or after a specified period, it would disclose publicly the information” regarding negotiations with the ad hoc group and company parties.

The Ruby Pipeline crosses northern Utah and northern Nevada, and it has a capacity of about 1.5 billion cubic feet per day (Bcf/d). The project owners filed an application with the Federal Energy Regulatory Commission (FERC) on Jan. 27, 2009, authorizing the construction and operation of the pipeline. FERC approved the application on April 5, 2010. Construction began on July 31, 2010, and the pipeline was placed in service on July 28, 2011.

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