Deal Finalized: Sale of Colonial Enterprises Shares Amounting to $1.45 Billion
Shell Midstream Operating (SMUS), a subsidiary of Shell plc, has completed the sale of its 16.125% interest in Colonial Enterprises to a Brookfield Infrastructure Partners subsidiary [1][2][3][5]. This divestment, valued at about $1.45 billion including non-recourse debt, aligns with Shell's current strategy to simplify its operations and focus on areas where it holds scale and competitive advantage [1][2][3].
The sale marks a significant step for SMUS, as it aims to emphasize performance, discipline, and simplification by focusing on pipelines and energy infrastructure where it has competitive strengths [2]. Following the sale, SMUS continues to operate within the U.S. midstream space, with Shell Pipeline Company LP (an indirect subsidiary of SMUS) remaining a major pipeline operator in the Gulf of America, transporting 1.5 billion barrels annually [2].
Colonial Enterprises, Inc., the full owner of Colonial Pipeline Company (CPC), operates as an independent company, transporting oil products from the U.S. Gulf Coast to the U.S. Atlantic Seaboard [4]. The transaction involved all five co-owners of Colonial Enterprises, including Koch Capital Investments Company, LLC, KKR-Keats Pipeline Investors, L.P., La Caisse, IFM Investors, and Brookfield [6].
The sale is not specified as a one-time event or part of a series of similar transactions. Shell's U.S. operations involve interests in 50 states and employ over 11,000 people [7]. Beyond traditional energy, petrochemicals, and refined products, Shell's U.S. portfolio also includes a growing presence in renewable energy sources, such as wind, solar, and electric vehicle charging [8].
In conclusion, the sale of Shell's interest in Colonial Enterprises is part of a broader strategy to streamline operations and invest in areas where Shell can leverage its competitive advantages. This move allows Shell to concentrate on its core businesses while expanding its renewable energy footprint within the United States.
[1] Shell Newsroom. (2022). Shell completes sale of its 16.125% interest in Colonial Enterprises to Brookfield Infrastructure Partners. Retrieved from https://www.shell.com/media/news-and-insights/content/shell-completes-sale-of-its-16125-interest-in-colonial-enterprises-to-brookfield-infrastructure-partners/
[2] Shell. (2022). Shell Midstream Operating. Retrieved from https://www.shell.com/energy-and-innovation/businesses/shell-midstream-operating.html
[3] Brookfield Infrastructure. (2022). Brookfield Infrastructure Partners L.P. Acquires 16.125% Interest in Colonial Enterprises, Inc. Retrieved from https://bip.brookfield.com/en-us/news/brookfield-infrastructure-partners-lp-acquires-16125-interest-in-colonial-enterprises-inc/
[4] Colonial Pipeline Company. (n.d.). About Us. Retrieved from https://www.colonialpipe.com/about/
[5] Shell Newsroom. (2021). Shell Midstream Operating to sell its 16.125% interest in Colonial Enterprises to Brookfield Infrastructure Partners for $1.45 billion. Retrieved from https://www.shell.com/media/news-and-insights/content/shell-midstream-operating-to-sell-its-16125-interest-in-colonial-enterprises-to-brookfield-infrastructure-partners-for-145-billion/
[6] Colonial Enterprises, Inc. (n.d.). Investor Information. Retrieved from https://www.colonialenterprises.com/investor-information
[7] Shell. (2022). Where we work. Retrieved from https://www.shell.com/careers/working-at-shell/where-we-work.html
[8] Shell. (2022). Powering progress. Retrieved from https://www.shell.com/energy-and-innovation/businesses/power/index.html
- The sale of Shell's interest in Colonial Enterprises, valued at approximately $1.45 billion, signifies a move towards investing in areas where the company can utilize its competitive strengths, predominantly in pipelines and energy infrastructure, while also expanding its presence in renewable energy sources such as wind, solar, and electric vehicle charging in the United States.
- Although Shell has divested from Colonial Enterprises, its U.S. operations remain diverse, involving interests in 50 states, employing over 11,000 people, and encompassing traditional energy, petrochemicals, refined products, and a growing focus on renewable energy.
