Shell has completed the sale of its 16.125% stake in Colonial Enterprises, Inc. to Brookfield Infrastructure Partners L.P. for $1.45 billion.
Shell Midstream Operating LLC (SMUS), a subsidiary of Shell plc, announced today the successful completion of the previously disclosed sale of its 16.125% interest in Colonial Enterprises, Inc. to Colossus AcquireCo LLC, a wholly owned subsidiary of Brookfield Infrastructure Partners L.P. and its institutional partners. The transaction, valued at $1.45 billion for Shell’s share, inclusive of approximately $500 million in non-recourse debt, marks a significant step in Shell’s ongoing efforts to enhance simplify its global operations.
The divestment aligns with Shell’s strategic objective of concentrating on areas where it possesses substantial scale and competitive advantage. This move enables the energy giant to reallocate resources and focus on its core businesses, optimizing its portfolio for future growth and efficiency. Andrew Smith, President of Shell Trading & Supply, had previously emphasized that this divestment "will allow us to concentrate on areas where we have scale and competitive advantage," a vision that has now come to fruition with the completion of the sale.
Colonial Enterprises, Inc. operates as an independent entity and holds full ownership of Colonial Pipeline Company (CPC), a non-operated venture, and Colonial Marketing Company. CPC plays a crucial role in the American energy landscape, providing essential oil products transportation services from the US Gulf Coast to the US Atlantic Seaboard. The pipeline network is a critical piece of infrastructure, ensuring the reliable supply of refined products across a significant portion of the Eastern United States.
Prior to this sale, Colonial was collectively owned by five distinct partners. Along with Shell Midstream Operating LLC’s 16.125% interest, the other stakeholders included Koch Capital Investments Company, LLC (28.088%), KKR-Keats Pipeline Investors, L.P. (23.443%), La Caisse (16.549%), and IFM Investors (IFM) (15.795%). The completion of this transaction signifies that Brookfield, through Colossus AcquireCo LLC, has now acquired 100% of the Colonial shares from all the co-owners, consolidating ownership under the Brookfield umbrella.
Shell Midstream Operating LLC, an indirect, wholly owned subsidiary of Shell Pipeline Company LP, stands as the largest natural gas pipeline operator in the Gulf of America. Its extensive network is responsible for the annual transportation of approximately 1.5 billion barrels of crude oil, refined products, chemicals, and NGLs across 12 states and the Gulf of America. While divesting this specific interest, Shell maintains a robust presence in the U.S. market.
