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Shell in terminal assets deal

Published by , Assistant Editor
Tanks and Terminals,

Shell Midstream Partners, L.P. entered into a purchase and sale agreement to acquire from wholly owned subsidiaries of Shell a 100% interest in five products terminals and partial interest in two Gulf of Mexico corridor pipelines and in two strategic onshore pipelines for US$825 million.

The acquisition price reflects an approximate 7.9 times multiple of the assets' forecasted 2018 adjusted earnings before interest, taxes, depreciation and amortisation and is expected to be immediately accretive to unitholders. Shell Midstream Partners intends to fund the acquisition with borrowings under new and existing credit facilities.

Highlights of the assets to be acquired:

  • A 100% interest in Triton West LLC, which owns the Anacortes, Colex, Des Plaines, Portland and Seattle products terminals. The terminals are strategically located with take-or-pay contracts with wholly owned subsidiaries of Shell. Each contract has an initial term of 10 years with options to extend up to 20 years. The acquisition of the products terminals builds upon Shell Midstream Partners' strategy to access assets across Shell's broad asset base.
  • A 22.9% interest in Mars Oil Pipeline Co. LLC (Mars) and a 22% interest in Odyssey Pipeline LLC (Odyssey). Both Mars and Odyssey serve high growth areas of the Gulf of Mexico. Following the closing of the transaction, Shell Midstream Partners will own 71.5% of Mars and 71% of Odyssey.
  • A 10% interest in Explorer Pipeline Co. (Explorer) and a 41.48% interest in LOCAP LLC (LOCAP). Explorer owns a 1830-mile products pipeline extending from Gulf Coast refineries to the upper Midwest. LOCAP owns a 55-mile common carrier crude pipeline from the LOOP Clovelly Salt Dome facility to the active trading hub of St. James, Louisiana.

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