Shell Midstream Partners has agreed to acquire Shell’s ownership interest in Amberjack Pipeline Company for $1.22bn. 

“I’m pleased to announce our largest acquisition to date.  This is a significant milestone for Shell Midstream Partners,” said Kevin Nichols, Chief Executive Officer. “The Amberjack pipeline is strategically located to capture value in a prolific area in the Gulf of Mexico and represents another key corridor that is set to benefit from organic growth. This acquisition, combined with our equity raise earlier in the year, further demonstrates our ability to deliver against our promises and positions us well for the future.”

The pipeline currently transports roughly 300,000 barrels per day due to the success of Jack St. Malo and Tahiti.  The pipeline is forecasted to transport approximately 400,000 barrels per day by the end of 2019 from continued in-field development, as well as new projects expected to come online.

Shell Midstream Partners’ share of Amberjack’s annualised net income estimated using the second quarter of 2018 forecast is nearly $120m with the second quarter dividend estimated to be about $34m. Following the completion of anticipated growth projects, the company’s share of Amberjack’s net income is expected to increase to an annual run rate of approximately $145m by the end of 2018 with an associated quarterly dividend of approximately $40m. Shell Midstream Partners plans to fund this acquisition with borrowings under existing credit facilities.

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14th May 2018