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Shell Midstream to acquire $825m worth terminals and pipelines from Shell

Houston-based Shell Midstream Partners has agreed to buy $825m worth of terminals and pipelines in the US from the subsidiaries of its parent company Royal Dutch Shell.

The acquisitions include 100% stake in five products terminals and partial stakes in two Gulf of Mexico corridor pipelines and in two onshore pipelines.

As part of the deal, Shell Midstream will buy Triton West, the owner of the Anacortes, Colex, Seattle, Des Plaines and Portland products terminals.

The midstream company says that the terminals are located strategically and have take-or-pay contracts with Shell’s wholly owned subsidiaries. With an initial term of 10 years, each of the contracts comes with options to be extended for up to 20 years.

Shell Midstream stated that the acquisition of the terminals consolidates on its strategy to access assets in the wide asset base of its parent.

The company will raise its existing stakes by 22.9% and 22% respectively in Mars Oil Pipeline Company and Odyssey Pipeline, two pipeline operators that cater to the high growth areas of the Gulf of Mexico. After the completion of the deal, Shell Midstream’s stake in Mars will be 71.5% and in Odyssey, it will be 71%. 

Shell Midstream will also be acquiring stakes of 10% and 41.8% in two onshore pipeline operators Explorer Pipeline Company and Locap, respectively.

Explorer is the owner of a 2,945km long products pipeline that stretches from Gulf Coast refineries to the upper Midwest. On the other hand, Locap owns an 88.5km long common carrier crude pipeline extending from the LOOP Clovelly Salt Dome facility to the active trading hub of St. James in Louisiana state.  

Subject to customary closing conditions, the acquisitions are expected to be closed on or around 1 December, 2017.

In May this year, Shell Midstream made a $630m deal to acquire Refinery Gas Pipelines, Delta Pipeline and Na Kika Pipeline from wholly owned subsidiaries of Shell.