Shell Midstream Partners, L.P to acquire terminal and pipeline assets
Published by Stephanie Roker,
Editor
World Pipelines,
Shell Midstream Partners, L.P. has entered into a purchase and sale agreement to acquire – from wholly owned subsidiaries of Shell – a 100% interest in five products terminals and partial interest in two Gulf of Mexico corridor pipelines and in two strategic onshore pipelines for US$825 million.
The acquisition price reflects an approximate 7.9 times multiple of the assets’ forecasted 2018 adjusted earnings before interest, taxes, depreciation and amortisation and is expected to be immediately accretive to unitholders. Shell Midstream Partners intends to fund the acquisition with borrowings under new and existing credit facilities. The acquisition is expected to close on or around 1 December 2017, subject to customary closing conditions.
Highlights of the assets to be acquired:
- A 100% interest in Triton West LLC, which owns the Anacortes, Colex, Des Plaines, Portland, and Seattle products terminals. The terminals are strategically located with take-or-pay contracts with wholly owned subsidiaries of Shell. Each contract has an initial term of 10 years with options to extend up to 20 years. The acquisition of the products terminals builds upon Shell Midstream Partners’ strategy to access assets across Shell’s broad asset base.
- A 22.9% interest in Mars Oil Pipeline Company LLC (Mars) and a 22% interest in Odyssey Pipeline LLC (Odyssey). Both Mars and Odyssey serve high growth areas of the Gulf of Mexico. Following the closing of the transaction, Shell Midstream Partners will own 71.5% of Mars and 71% of Odyssey.
- A 10% interest in Explorer Pipeline Company (Explorer) and a 41.48% interest in LOCAP LLC (LOCAP). Explorer owns a 1830 mile products pipeline extending from Gulf Coast refineries to the upper Midwest. LOCAP owns a 55 mile common carrier crude pipeline from the LOOP Clovelly Salt Dome facility to the active trading hub of St. James, Louisiana.
The terms of the acquisition were approved by the conflicts committee of the Board of Directors of the General Partner of Shell Midstream Partners, which is comprised entirely of independent directors. This committee was advised by Tudor, Pickering, Holt & Co. as to financial matters and Akin Gump Strauss Hauer & Feld LLP as to legal matters.
Read the article online at: https://www.worldpipelines.com/business-news/29112017/shell-midstream-partners-lp-to-acquire-terminal-and-pipeline-assets/
You might also like
World Pipelines Podcast: Going global with IPLOCA
In this episode, Elizabeth Corner speaks to Georges Hage, Executive Secretary at IPLOCA, about IPLOCA's insights on the culture and characteristics of the pipeline contractor community, and how it works to support sustainable energy infrastructure.
Construction begins on Greensand’s carbon dioxide transit terminal at Port Esbjerg
When the tanks are full, the liquefied carbon dioxide will be loaded onto a dedicated carrier from Royal Wagenborg and shipped to the INEOS Nini platform in the Danish North Sea. From there, it will be safely injected via pipeline into subsurface reservoirs approximately 1800 m beneath the seabed for permanent storage.
