Shell Midstream Partners plans to acquire Shell’s 25.97% equity interest in Explorer Pipeline Company and 10.125% equity interest in Colonial Pipeline Company for $800 million.
The acquisition will increase Shell Midstream Partners’ interest in Explorer to 38.59% and in Colonial to 16.125%.
The company says that the key value drivers for the transaction include the fact that it gives them strategic access to growing advantaged refined products supply from the Gulf Coast and an increased position in midstream assets delivering ratable and growing cash flows.
The acquisition is expected to close in the second quarter of 2019.
Kevin Nichols, CEO of Shell Midstream Partners, says: ‘This acquisition is evidence of our strategy in action – we will continue to build scale with diversified assets that provide robust, ratable cash flows.
‘The Explorer and Colonial systems have the capacity to deliver some three million barrels per day of refined products, providing energy to key demand centers of the US.’