Shell Midstream Partners to buy stake in Amberjack Pipeline

Shell Midstream Partners has signed an agreement to buy parent company Royal Dutch Shell’s ownership in Amberjack Pipeline Company.

The $1.22bn deal includes 75% of Amberjack Series A and 50% of Amberjack Series B.

Shell Midstream Partners CEO Kevin Nichols said: “I’m pleased to announce our largest acquisition to date. This is a significant milestone for Shell Midstream Partners.

“The Amberjack pipeline is strategically located to capture value in a prolific area in the Gulf of Mexico and represents another key corridor that is set to benefit from organic growth.

“This purchase, combined with our equity raise earlier in the year, further demonstrates our ability to deliver against our promises and positions us well for the future.”

The pipeline transports around 300,000 barrels per day (bpd) and is expected to transport around 400,000bpd by the end of this year.

This pipeline is also claimed to have good connectivity in the Gulf of Mexico, providing delivery options along the Texas and Louisiana Gulf Coast.

Shippers are able to deliver four kinds of crude grades into multiple pipelines at the project. This is considered to be a significant value driver for shippers as they can leverage arbitrage opportunities between crude grades and delivery locations.