Royal Dutch Shell to sell its stake in Amberjack Pipeline for $1.22 bn
11 May 2018
European petroleum and gas giant Royal Dutch Shell yesterday struck a deal to sell its stake in Amberjack Pipeline Co to its master limited partnership Shell Midstream Partners LP for $1.22 billion.
The Amberjack pipeline, located in the Gulf of Mexico, is a joint venture between Chevron Corp and Shell.
Shell Midstream Partners, which was formed by Shell to operate, develop and acquire pipelines and other midstream assets, plans to fund the acquisition with borrowings under existing credit facilities.
The acquisition is expected to close on or around 11 May, subject to closing conditions.
This internal transfer of assets is seen by analysts as a routine transfer by energy companies in order to boost the value of their midstream assets without losing ownership of critical infrastructure.
The Amberjack pipeline transports around 300,000 barrels per day of oil, and is expected to transport about 400,000 barrels per day by the end of 2019.
Kevin Nichols, CEO of Shell Mainstream Partners, said, “I’m pleased to announce our largest acquisition to date. This is a significant milestone for Shell Midstream Partners,”
“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.”