Shell Sells Onshore Crude Pipeline
Shell Pipeline Company LP announced the proposed sale of the majority of the company's onshore crude pipeline systems. The announcement comes following the review of Shell Oil Products US portfolio.
Stacy Methvin, president of Shell Pipeline Company LP noted, "These systems are no longer strategic to Shell due to the prior sale of the company's inland refineries. The sale will allow Shell Pipeline to focus on the movement of offshore crude to coastal refineries, as well as the transport of refined products to major population centers from those coastal refineries. We anticipate these assets will be more strategic to others; by divesting today, we can realize greater value than by continuing to own and operate them."
The assets to be sold are the Ozark pipeline, the W. Tulsa 10-inch pipeline, the Cushing Tank Farms, Poplar pipeline and the Powder River and Baker gathering systems. In addition, Shell Pipeline's ownership interest in the Capline, Capwood, Woodpat, Osage and Little Missouri pipeline systems will be sold.
The Capline/Capwood system supplies crude from the Louisiana Gulf Coast to mid-continent. Shell Pipeline is the operator of the Capline, an undivided interest system in which Shell owns 21.8 percent. The Capwood pipeline is also an undivided interest system of which Shell Pipeline owns 76.3 percent and is the operator.
The Ozark, Woodpat and Osage package forms an integrated network of more than 600 miles of pipeline, connecting the industry's hub in Cushing, OK. to Patoka, IL. and El Dorado, KS. The Cushing terminals consist of sixty-three crude oil tanks and are connected to 13 pipeline companies. Woodpat is an undivided interest pipeline system of which Shell Pipeline owns 60 percent. Osage is a stock company in which Shell Pipeline has 58.8 percent ownership and is the operator.
The Rocky Mountain Pipeline sale package consists of the Poplar pipeline, the Baker and Powder River gathering systems, Shell Pipeline's undivided interest (60 percent) in the Little Missouri pipeline, and Shell's stock ownership (78.1 percent) in Butte Pipe Line Company.
The three packages will be offered for sale through a competitive bidding
process beginning mid-March. Shell Pipeline expects to close the sales by the
end of 2003.