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Shell Midstream acquires GoM pipeline interests

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World Pipelines,

Shell Midstream Partners, L.P. recently announced that it has acquired a 10% stake in Proteus Oil Pipeline Company, LLC (Proteus), 10% in Endymion Oil Pipeline Company, LLC (Endymion), and 1% in Cleopatra Gas Gathering Company, LLC (Cleopatra) from BP.

Proteus is a 71 mile crude oil pipeline with a 425 000 bpd capacity. The pipeline provides access to the Mississippi Canyon area of the Gulf of Mexico (GoM) from the Thunder Horse and Thunder Hawk platform to the Proteus SP 89E Platform. Noble Energy's Big Bend and Dantzler fields are tied back to the Thunder Hawk platform.

Endymion is an 89 mile crude oil pipeline with a 425 000 bpd capacity. This pipeline also provides access to the Mississippi Canyon area.

Cleopatra is a 115 mile gas gathering pipeline in Southern Green Canyon, with access to Atwater Valley, Walker Ridge and Lund areas. Cleopatra is currently connected to the Holstein, Atlantis, Neptune, Shenzi and Mad Dog platforms. The system will transport new volumes from the Mad Dog 2 field when it is online.

The acquisition price reflects approximately 7.7 times multiple of Shell's forecasted annual average adjusted EBITDA attributable to the purchased interests over 2017 and 2018.

"This acquisition builds on our corridor pipeline strategy in the GoM. Our sponsor, Shell Pipeline Company is currently building the Mattox pipeline to serve the recently sanctioned Appomattox platform. Proteus and Endymion will connect the Mattox pipeline to onshore markets, creating a new corridor line, which will transport all of Appomattox's volumes once it comes online toward the end of the decade," said John Hollowell, CEO of Shell Midstream Partners.

"Proteus also connects to the Thunder Horse platform, which is a key development field for BP and ExxonMobil. In addition to Thunder Horse, Proteus is also currently connected to the Noble Energy, Inc. operated Thunder Hawk platform. This acquisition will deepen our footprint in the Eastern Gulf of Mexico, an active area with a number of discoveries currently under appraisal."

The terms of the acquisition have been approved by the board of directors of the General Partner of Shell Midstream Partners.

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Gulf of Mexico pipeline news Crude oil pipeline news ExxonMobil news