Houston, Nov. 11, 2015 (GLOBE NEWSWIRE) —
Shell Midstream Partners, L.P. (SHLX) today announced the execution of a Contribution Agreement to acquire Pecten Midstream LLC, which owns Lockport Crude Terminal (Lockport) and Auger Pipeline System (Auger), for $390 million from Shell Pipeline Company LP, a wholly owned subsidiary of Royal Dutch Shell plc.
The acquisition price reflects an approximate 8.6 times multiple of the assets’ forecasted 2016 adjusted earnings before interest, taxes, depreciation and amortization. The acquisition will be effective October 1, 2015 and is expected to be immediately accretive to unitholders. In connection with the acquisition, Shell Midstream Partners increased its total borrowing capacity under its revolving credit facilities to $580 million. The acquisition is expected to close on or about November 17, 2015, subject to customary closing conditions. Shell Midstream Partners expects to fund the acquisition with proceeds from a capital markets transaction, borrowings under existing revolving credit facilities, cash on hand, or a combination thereof.
Highlights of the acquired assets:
- Auger is a 174 mile offshore Gulf of Mexico (“GoM”) pipeline system that transports crude from producers in eastern Garden Banks and Keathley Canyon blocks. It shares a complementary strategic connection to Poseidon through SMI 205.
- Lockport is a crude storage terminal facility located southwest of Chicago with two million barrels of storage capacity that feeds regional refineries, while also offering strategic trading opportunities.
- 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 LLP as to legal matters.
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About Shell Midstream Partners, L.P.
Shell Midstream Partners 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 interests in entities that own crude oil and refined products pipeline systems and related assets that serve as key infrastructure to transport and store growing onshore and offshore crude oil production to refining markets and to deliver refined products from those markets to major demand centers.