Shell Midstream Partners, L.P. recently announced that it has agreed to acquire a 2.62% equity interest in Explorer Pipeline Company (Explorer). The acquisition will be made in connection with current shareholder of Explorer, Shell Pipeline Company LP’s right. Shell Midstream Partners, L.P. will acquire a portion of an equity interest divested by another shareholder of Explorer.
Shell Pipeline Company LP separately owns, and will retain, a 35.97% equity interest in Explorer. However, this acquisition introduces a new, refined products line to Shell Midstream Partners’ portfolio.
“Shell Midstream Partners is pleased to bring the Explorer Pipeline into our portfolio. This was an opportunistic acquisition for the partnership that aligns with our strategic intent to diversify our cash flows and bring forward accretive deals that complement our footprint,” said John Hollowell, Chief Executive Officer of Shell Midstream Partners.
Explorer is recognised as a leading petroleum products transporter, serving more than 70 major cities in 16 states. Its 1830 mile pipeline transports gasoline, diesel, fuel oil and jet fuel with an average flow that exceeds 600 000 bpd.
Explorer continues to diversify its portfolio of services for its shippers. Recently, Explorer invested in approximately 18 miles of new pipe to transport diluent in Illinois.
This acquisition is expected to be immediately accretive to unit holders and funded with available cash. The terms of the acquisition were approved by the Board of Directors of the general partner of Shell Midstream Partners and is expected to close in August 2016, subject to regulatory approvals.
Adapted from press release by Anna Nicklin
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