Royal Dutch Shell Plc (NYSE: RDS-A, RDS-B) will sell shares in a U.S. pipeline business in the second half of this year as Europe’s largest oil company takes advantage of investor appetite for North America’s energy infrastructure, Bloomberg said June 18.
Shell Midstream Partners LP’s assets are expected to consist of ownership interests in four onshore and offshore pipelines located primarily in Texas and Louisiana, according to a statement June 18. The Houston-based company will trade on the New York Stock Exchange under the ticker “SHLX.”
Pipeline companies structured as tax-exempt MLPs have attracted investors by returning almost all their income to shareholders. Share prices have soared as operators benefit from the boom in oil and gas production from U.S. shale fields.
Shell’s announcement follows William Partners LP’s (NYSE: WPZ) proposed $6 billion acquisition of Access Midstream Partners LP (NYSE: ACMP) this month, a deal that would create one of the largest U.S. pipeline operators.
The Cushing 30 MLP index, which tracks the partnerships, has produced total returns of 24% over the last year, beating the S&P 500’s 20% total return, which includes reinvested dividends.
Barclays Plc (NYSE: BCS) and Citigroup Inc. (NYSE: C) are managing the proposed share sale, Shell said. The banks are the two leading advisors on North American pipeline deals this year, according to data compiled by Bloomberg.
The assets for sale include stakes in the Ho-Ho network linking Houston and Houma in Louisiana, an offshore pipeline to the Mars Field in the Gulf of Mexico and the Bengal and Colonial Pipelines, which deliver fuel through the eastern U.S.
The filing did not say how much Shell is aiming to raise from the share sale.
Shell CEO Ben van Beurden is selling assets to focus capital on projects with highest returns for investors. On June 17, it announced it would raise $5 billion by selling a stake in Woodside Petroleum Ltd. (ASX: WPL.AX, OTC: WOPEY), Australia’s largest oil and gas producer.
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