Shell Midstream Partners LP (NYSE: SHLX) said May 10 it would buy parent Royal Dutch Shell Plc's (NYSE: RDS.A) stake in the Amberjack Pipeline Co. for $1.22 billion.

The acquisition is the Houston-based pipeline operator's largest purchase to date.

“This is a significant milestone for Shell Midstream Partners,” Kevin Nichols, CEO, said in a statement. “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.”

The Amberjack pipeline, located in the Gulf of Mexico, transports roughly 300,000 barrels per day (bbl/d) of oil. The pipeline is forecasted to transport about 400,000 bbl/d by the end of 2019 from continued in-field development, as well as new projects expected to come online.

The acquisition is expected to close on or around May 11, subject to customary closing conditions.

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 is composed entirely of independent directors. The committee was advised by Tudor Pickering Holt & Co. Advisors LP as to financial matters and Akin Gump Strauss Hauer & Feld LLP as to legal matters.

Reuters contributed to this report.

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