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NorthAmOil INVESTMENT NorthAmOil
Shell to acquire Shell Midstream
Partners in nearly $2bn deal
UNITED STATES SHELL announced this week that it had reached tanks, docks, truck and rail racks and other
an agreement to acquire its Shell Midstream infrastructure used to stage and transport inter-
Partners master limited partnership (MLP) for mediate and finished products. Its assets also
$1.96bn. include interests in entities that own natural gas
The deal is the latest MLP roll-up in the US and refinery gas pipelines that transport offshore
midstream sector, with the trend largely driven natural gas to market hubs and deliver refinery
by the elimination of incentive distribution gas from refineries and plants to chemical sites
rights. The oil and gas industry had previously along the Gulf Coast.
financed billions of dollars in pipeline and stor- A subsidiary of Shell USA currently owns
age infrastructure investments through the use 269,457,304 common units of Shell Midstream,
of MLPs. Now, though, a number of MLPs are or around 68.5% of the total common units.
being rolled up into their parent companies. Under the newly announced merger agreement,
Shell Midstream’s assets include interests in Shell USA will acquire all of the common units
entities that own crude and refined products representing limited partner interests in Shell
pipelines and terminals for transporting onshore Midstream held by the public at $15.85 per
and offshore oil production to US Gulf Coast public common unit in cash. The subsidiary
and Midwest refining markets. has agreed to approve the transaction, which is
This infrastructure is also used to deliver anticipated to be completed in the fourth quarter
refined products from those markets to major of this year.
demand centres. The MLP also has interests in Days after the transaction was announced,
entities that own storage tanks and financing Shell Midstream posted a profit of $148mn for
receivables that are secured by pipelines, storage the second quarter of the year.
Week 30 31•July•2022 www. NEWSBASE .com P9
