In September 2016, Shell Midstream Partners (SHLX) acquired an additional 20% equity interest in the Mars oil pipeline and 49% in the Odyssey pipeline from Shell for $350 million.
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In a related news release, the CEO of Shell Midstream Partners, John Hollowell, said, “This acquisition further diversifies the Shell Midstream Partners portfolio with the inclusion of a well-positioned eastern Gulf of Mexico asset. In addition, the partnership acquired an additional interest in an existing asset with a strong track record of delivery.”
Hollowell added, “Both Mars and Odyssey build on our key corridor pipeline strategy in the Gulf of Mexico and are advantageously positioned to continue to capture growth of offshore volumes along our footprint of assets.”
The graphic above lists the assets of SHLX and the corresponding interest held by SHLX and its promoter, Royal Dutch Shell plc.
SHLX’s Mars system delivers crude from the Mars Basin and the Amberjack system, offering 600 Mbpd (thousand barrels per day) of capacity. Odyssey system has 220 Mbpd of capacity from the eastern Gulf of Mexico to the Delta Pipeline system, enabling deliveries to refineries in Louisiana and Mississippi.
In May 2016, SHLX acquired additional equity interest in Zydeco Pipeline Company, Bengal Pipeline Company, and Colonial Pipeline Company from Royal Dutch Shell plc for $700 million.
Shell Midstream Partners transports crude oil to Gulf Coast and Midwest refining markets and delivers refined products from Gulf Coast markets to demand centers. SHLX was listed on the NYSE in October 2014, and it forms ~1.7% of the Alerian MLP ETF (AMLP).
Next, let’s take a look at Shell Midstream Partners’s leverage and its recent equity issuances.