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Shell Plans To Spin Off US Midstream Assets

|Includes:Royal Dutch Shell plc (RDS.A)

Shell said that it would spin off some of its US midstream assets into an MLP and take it public, becoming the first of the industry majors to use such a structure to monetize assets. The company said it intends to list its common units on the New York Stock Exchange under the symbol "SHLX".

Shell Midstream plans to use proceeds from the offering to acquire stakes in Shell's other pipelines. Barclays and Citigroup are underwriting the IPO.

Shell Midstream's assets include a 43% stake in a crude oil pipeline connecting Houston in Texas to Houma in Louisiana, a 28.6% stake in a pipeline to the offshore Mars Field in GoM and a 49% stake in a refined products pipeline linked to four Louisiana refineries.

The company's plan to spin off its pipeline assets comes a day after it launched a sale of most of its stake in Woodside Petroleum.

In June-2014, Shell entered into an agreement with Osum Oil Sands Corporation to divest its stake in the Orion Oil Sands for $298 million.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: RDS.A