Shell Midstream Partners, L.P. has entered into an agreement to acquire Shell’s 25.97 percent equity interest in Explorer Pipeline Company (Explorer) and 10.125 percent equity interest in Colonial Pipeline Company (Colonial) for $800 million. 

The acquisition will increase Shell Midstream Partners’ interest in Explorer to 38.59 percent and in Colonial to 16.125 percent. 

“This acquisition is evidence of our strategy in action – we will continue to build scale with diversified assets that provide robust, ratable cash flows,” said Kevin Nichols, CEO of Shell Midstream Partners. “The Explorer and Colonial systems have the capacity to deliver some three million barrels per day of refined products, providing energy to key demand centres of the United States.”

The acquisition is expected to close in the second quarter of 2019.

Explorer is recognised as one of the nation’s leading petroleum products transporters serving more than 70 major cities in 16 states. Its 1,830-mile pipeline transports gasoline, diesel, fuel oil and jet fuel with a capacity of 660,000 barrels per day. Explorer continues to diversify its portfolio of services for its shippers. 

Colonial is the largest refined products pipeline in the United States. The pipeline starts in Houston, Texas, and terminates in New York harbour, serving all major metropolitan areas along its route. It supplies approximately 50 percent of the refined products consumed on the East Coast, sourcing supply from approximately 29 refineries and delivering to more than 260 terminals. 

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 consists entirely of independent directors. The committee was advised by Evercore Group, L.L.C. as to financial matters and Hunton Andrews Kurth LLP as to legal matters. 

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14th May 2019