Houston, May 05, 2017 (GLOBE NEWSWIRE) — Shell Midstream Partners, L.P. (NYSE: SHLX) entered into a purchase and sale agreement to acquire a 100% interest in the Refinery Gas Pipelines, Delta Pipeline and Na Kika Pipeline for $630 million from wholly owned subsidiaries of Shell.
The acquisition price reflects an approximate 8.4 times multiple of the assets’ forecasted next twelve months adjusted earnings before interest, taxes, depreciation and amortization and is expected to be immediately accretive to unitholders. Shell Midstream Partners intends to fund the acquisition with a combination of borrowings under existing credit facilities and cash on hand. The acquisition is expected to close on or around May 10, 2017, subject to customary closing conditions.
Highlights of the acquired assets:
- Refinery Gas Pipelines: A network of approximately 100 miles of gas pipeline connecting multiple refineries and plants operated along the Gulf Coast to Shell Chemical sites, including Shell’s Norco refinery and Deer Park refinery. The pipelines transport a mix of methane, natural gas liquids and olefins. This is the first drop down of assets from outside of Shell Pipeline Company and represents an important milestone for Shell Midstream Partners.
- Delta Pipeline: An approximately 130-mile onshore pipeline aggregating volumes from five offshore pipelines including Shell Midstream Partners’ Odyssey Pipeline and the Na Kika Pipeline. This acquisition connects offshore oil production in the eastern corridor of the Gulf of Mexico to key onshore markets.
- Na Kika Pipeline: An approximately 80-mile offshore pipeline anchored by the Na Kika platform which serves as a host to eight different subsea fields and connects to the Delta Pipeline at Main Pass 69.
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 comprised entirely of independent directors. This committee was advised by Evercore Group, L.L.C. as to financial matters and Andrews Kurth Kenyon LLP as to legal matters.
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ABOUT SHELL MIDSTREAM PARTNERS, L.P.
Shell Midstream Partners, headquartered in Houston, Texas, is a fee-based, growth-oriented midstream master limited partnership formed by Royal Dutch Shell to own, operate, develop and acquire pipelines and other midstream assets. Shell Midstream Partners’ assets consist of pipelines, crude tank storage and terminal systems that serve as key infrastructure to transport and store onshore and offshore crude oil production to Gulf Coast and Midwest refining markets and to deliver refined products from Gulf Coast markets to major demand centers.
For more information on Shell Midstream Partners and the assets owned by the partnership, please visit www.shellmidstreampartners.com.
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