Shell Midstream Partners Refined Products Pipeline Systems

Shell Midstream Partners’ (SHLX) Bengal system is a joint venture established by the Colonial Pipeline Company and the Shell Pipeline Company, or SPLC. SHLX owns 49% of it.

The Bengal system is a 158-mile pipeline system that connects four refineries in Louisiana to long-haul transportation pipelines. The refined products pipeline system consists of two primary pipelines:

1. A pipeline with a capacity of 305,000 bpd (barrels per day) that connects Motiva and Valero Energy’s (VLO) refineries in Norco, and Marathon Petroleum’s (MPC) refinery in Grayville, to Bengal’s Baton Rouge, Louisiana tankage and the Plantation pipeline. Motiva is a joint venture between Shell (RDS.A) and Saudi Aramco, via subsidiaries. The plantation pipeline originates at Louisiana and ends at Washington DC.

2. A pipeline with a capacity of 210,000 bpd that runs from Motiva’s Convent, Louisiana refinery to the Plantation pipeline and Bengal’s Baton Rouge, Louisiana tankage.

VLO, RDS.A, and MPC are all components of the iShares Global Energy ETF (IXC). Together, these companies make up ~7% of the ETF.

The Baton Rouge tankage, with a capacity of approximately 4 million barrels, connects to the Colonial pipeline.

According to SHLX’s 10-K report, the Colonial pipeline system is the largest refined products pipeline in the US based on barrels per mile transported. It includes over 5,500 miles of pipeline connecting refineries along the Gulf Coast to ~265 marketing terminals located between Houston, Texas, and Linden, New Jersey.

Transporting more than 100 million gallons a day of refined products including gasoline, jet fuel, heating oil, et cetera, to shipper terminals across 13 states and the District of Columbia, the Colonial pipeline is responsible for 50% of refined petroleum product consumption on the East Coast.

SHLX owns 1.612% of the pipeline.

The following part of this series takes a look at how Shell Midstream Partners performed in the most recent quarter.