Shell’s pipeline spin-off plans

In a filing with the US Securities and Exchange Commission, Royal Dutch Shell has indicated its intent to float Shell Midstream Partners LP on the New York Stock Exchange.

Shell plans to spin-off several US pipelines into a publicly-traded partnership.

While Shell will maintain a controlling interest in the new company, it expects to sell US$ 750 million in shares and structure this particular business segment and master limited partnership, which foregoes corporate income taxes and distributor profits to stockholders on a regular basis.

Although Shell's pipeline float is a small segment of its multi-billions of global energy development and investments, it has never adequately promoted this important segment.

Substantial Shell pipeline business

Shell's management believes that putting its "very substantial" transmission and transportation sector into high profile will substantially increase its monetisation in sync with the unprecedented expenditures that US, Canadian, and Russo/Chinese pipeline demand will project into the headlines for investors and observers alike in the foreseeable future.

In perceiving Shell's midstream situation's future, it will own, operate, develop and acquire additional midstream assets, and will be based in Houston, with pipelines primarily located in Southern Texas and the Gulf of Mexico adjacent Louisiana, putting them close to the nation's densest refinery infrastructure.

According to the original SEC filing, Shell Midstream's transition component posted a net profit of US$ 15 million on revenues of US$ 36 million, as a starting point.

Shell Midstream Partners is a Texas-based company that owns, operates, develops, and acquires pipelines and other midstream assets.

Shell Midstream Partners owns interests in two crude oil pipeline systems, Zydeco and Mars, and two refined products systems, Bengal System and Colonial System. The crude oil pipelines are located along the Texas and Louisiana Gulf Coast and offshore Louisiana. These pipeline systems connect to the refined products pipelines, which connect Gulf Coast and southeastern US refineries to major demand centres from Alabama to New York.

Edited from various sources by Elizabeth Corner

Read the article online at: https://www.worldpipelines.com/business-news/24072014/shells-pipeline-spin-off-plans-671/