Shell Midstream Partners owns, operates, develops and acquires pipeline and other midstream and logistics assets in the U.S. from its headquarters in Houston. (Source: MDart10 / Shutterstock.com)
Shell USA Inc. agreed on July 25 to acquire Shell Midstream Partners LP in a buyout transaction worth nearly $2 billion.
The transaction marks the latest MLP roll-up in the midstream space largely seen as being driven by the elimination of incentive distribution rights. Previously, the oil and gas industry had financed billions of dollars in pipeline and storage infrastructure through the use of MLPs.
Based in Houston, Shell USA is the U.S. subsidiary of global supermajor Shell Plc headquartered in London. A subsidiary of Shell USA currently owns about 269.5 million common units of Shell Midstream Partners, or roughly 68.5% of Shell Midstream Partner common units, which owns, operates, develops and acquires pipeline and other midstream and logistics assets in the U.S. from its headquarters in Houston.
As part of the merger agreement announced July 25, Shell USA will acquire all of the common units representing limited partner interests in Shell Midstream Partners held by the public at $15.85 per public common unit in cash for a total value of approximately $1.96 billion.
Shell Midstream Partners’ assets include interests in crude oil and refined products pipelines and terminals that serve as key infrastructure to transport onshore and offshore crude oil production to U.S. Gulf Coast and Midwest refining markets. Its assets also include natural gas and refinery gas pipelines that transport offshore natural gas to market hubs and deliver refinery gas from refineries and plants to chemical sites along the U.S. Gulf Coast.
The transaction is expected to close in the fourth quarter.
Barclays Capital Inc. and Evercore Group LLC acted as financial advisers to Shell USA. Baker Botts LLP was Shell USA’s legal counsel, and Richards, Layton & Finger PA acted as special Delaware counsel to Shell USA on the transaction. Intrepid Partners LLC was financial adviser to the conflicts committee and Gibson, Dunn & Crutcher LLP acted as the conflicts committee’s legal counsel.
The conflicts committee consists solely of independent directors on the Shell Midstream Partners board.
Recommended Reading
NatGas Prices Drop After Freeport LNG Train Shutdown
2024-11-22 - Freeport LNG’s report says one of three liquefication trains went offline due to an oil lube pump issue on Nov. 20.
Darbonne: What are We Supposed to do Without Hydrocarbons?
2024-11-21 - Oil and Gas Investor asked individuals who understand fossil fuels if any “end oil” agitator has ever explained what the world would do without hydrocarbons. No, they haven’t gotten an answer either.
NatGas Storage Drops Ahead of Predictions
2024-11-21 - U.S. Energy Information Administration's weekly report shows the first withdrawal of the fall, a week before the consensus forecast.
US NatGas Prices Jump 7% to 1-Yr High on Surprise Storage Draw, Colder Forecasts
2024-11-21 - The U.S. Energy Information Administration said utilities pulled 3 Bcf of gas from storage during the week ended Nov. 15.
Trillion Energy’s Offshore Turkey Well Begins Gas Production
2024-09-11 - Trillion Energy’s Akcakoca-3’s wellhead pressure increased to 616 psi, allowing the well to be put into production.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.