Shell to divest interest in U.S. pipeline giant Colonial
Shell Midstream Operating LLC, a subsidiary of Shell plc, has agreed to sell its 16.125% stake in Colonial Enterprises, Inc. to Colossus AcquireCo LLC, a wholly owned subsidiary of Brookfield Infrastructure Partners and its institutional partners.
Shell Midstream Operating LLC, an indirect subsidiary of Shell Pipeline Company LP, is the largest pipeline operator in the Gulf of America, moving approximately 1.5 billion barrels of crude oil, refined products, chemicals, and NGLs annually across 12 states.
The deal is valued at USD 1.45 billion and is expected to conclude in the fourth quarter of 2025, pending regulatory approval.
“This divestment reflects our focus on performance, discipline and simplification,” said Andrew Smith, president of Shell Trading & Supply. “It will allow us to concentrate on areas where we have scale and competitive advantage.”
The transaction forms part of a broader agreement by all five stakeholders in Colonial Enterprises to sell 100% of the shares to Brookfield. Other shareholders include Koch Capital Investments, KKR-Keats Pipeline Investors, Caisse de dépôt et placement du Québec, and IFM Investors.
Colonial Enterprises fully owns the Colonial Pipeline Company (CPC), a non-operated joint venture that provides petroleum product transport from the U.S. Gulf Coast to the Atlantic Seaboard.
The Colonial Pipeline Company operates the largest refined petroleum products pipeline in the United States, spanning approximately 5,500 miles (8,850 kilometers). This extensive network originates in Houston, Texas, and terminates at the New York Harbor, connecting refineries to various markets along the U.S. East Coast. The pipeline delivers over 100 million gallons (approximately 2.5 million barrels) of fuel daily.
Pipeline transportation is a critical component of the U.S. energy infrastructure. In 2023, pipeline companies delivered 75% of the natural gas used to generate electric power in the United States, amounting to 27.1 billion cubic feet per day (Bcf/d). citeturn0search10 Additionally, the volume of goods transported in the U.S. pipeline market is projected to reach 1.43 trillion tonne-kilometers (TKM) in 2025.
