![Shell USA to Acquire Midstream MLP in $1.96 Billion Buyout](/sites/default/files/styles/hart_news_article_image_640/public/image/2022/07/shell-usa-acquire-midstream-mlp-196-billion-buyout.jpg?itok=cfSNWFUg)
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
Spate of New Contracts Boosts TechnipFMC's Subsea Profits
2024-04-30 - TechnipFMC's operational profits are growing as the company heightened its focus on “quality” subsea orders, which earned $2.4 billion for the first quarter.
Message in a Bottle: Tracing Production from Zone to Wellhead
2024-04-30 - New tracers by RESMAN Energy Technology enable measurement while a well is still producing.
TGS Starts Up Multiclient Wind, Metaocean North Sea Campaign
2024-05-07 - TGS is utilizing two laser imaging and ranging buoys to receive detailed wind measurements and metaocean data, with the goal of supporting decision-making in wind lease rounds in the German Bright.
Trendsetter to Deliver Subsea Manifolds Offshore Brazil to Trident Energy
2024-06-13 - The subsea contract follows Trendsetter establishing local facilities in Brazil.
E&P Highlights: June 10, 2024
2024-06-10 - Here’s a roundup of the latest E&P headlines, including a decline in global drilling activity and new contract awards.