We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Shell to Sell Sinco Pipeline and Colex Terminal to Edgewater
Read MoreHide Full Article
Shell plc’s (SHEL - Free Report) subsidiary, Shell USA, Inc., has announced that its both units, Shell Pipeline Company LP and Triton West LLC, will sell the entire stake in the Sinco pipeline system and Colex terminal to a subsidiary of Edgewater Midstream LLC (Edgewater), Houston, TX-based midstream company.
This strategic divestiture is aligned with Shell's ongoing efforts to simplify its portfolio and focus on more value-driven projects with lower emissions. The sale is subject to regulatory approval and expected to be completed in the fourth quarter of 2024, following Shell's previous sale of its equity in Deer Park Refinery. This sale rendered the Sinco pipeline and Colex terminal non-integrated and non-strategic within the company's broader "Powering Progress" strategy.
Shell’s Strategic Shift Toward Simplification
Shell's decision to sell the Sinco pipeline system and Colex terminal is part of a broader strategy aimed at optimizing its portfolio. This move reflects Shell's commitment to delivering more value while reducing its environmental footprint. According to Andrew Smith, Shell’s executive vice president of Trading & Supply, "This sale follows our guidance at Shell´s Capital Markets Day to continue to simplify our portfolio as we seek to deliver more value, with less emissions."
Impact on Shell’s Portfolio
The Sinco pipeline system and Colex terminal have been operated as integrated assets with the Deer Park Refinery. However, the sale of Shell's equity in Deer Park Refinery to Pemex in 2022 changed the strategic importance of these assets. With the Deer Park Refinery no longer part of Shell's portfolio, the Sinco pipeline and Colex terminal became non-integrated, making them less critical to Shell's operations.
Re-deployment of Capital
The proceeds from the sale will enable Shell to re-deploy capital to other projects that align more closely with its "Powering Progress" strategy. This strategy focuses on generating more value with fewer emissions, reinforcing Shell's commitment to sustainability and innovation in energy production.
Edgewater Midstream LLC: A Strategic Buyer
Edgewater Midstream LLC, the buyer of the Sinco pipeline system and Colex terminal, is a company focused on acquiring, developing and operating pipelines and terminals. Edgewater’s assets are strategically located near major petroleum trading hubs and demand centers in North America, primarily in coastal markets. This acquisition aligns with Edgewater’s strategy to expand the company’s footprint in key energy markets.
Edgewater’s Operational Expertise
Edgewater’s expertise in operating pipelines and terminals will be instrumental in maximizing the value of the Sinco pipeline system and Colex terminal. The company’s focus on strategic locations and efficient operations positions it as a capable steward of these assets, ensuring Edgewater’s continued contribution to the energy infrastructure in the Houston Ship Channel area.
Strategic Fit With Edgewater’s Portfolio
The addition of the Sinco pipeline system and Colex terminal to Edgewater’s portfolio enhances the company’s ability to serve key markets in North America. These assets are located in the Houston Ship Channel area, a key hub for petroleum trading and transportation. By acquiring these assets, Edgewater is poised to strengthen the company’s presence in one of the most important energy markets in the United States.
Significance of the Houston Ship Channel
The Houston Ship Channel is an important artery for the energy industry in the United States. It is one of the busiest shipping lanes in the world, facilitating the transportation of petroleum products, chemicals and other goods. The Sinco pipeline system and Colex terminal, located in this region, play a crucial role in the efficient movement of energy products to and from the Houston area.
Role of the Sinco Pipeline System
The Sinco pipeline system is a key component of the energy infrastructure in the Houston Ship Channel. The system transports crude oil, gasoline and other petroleum products through a vast network of pipelines, ensuring the reliable delivery of these essential products to refineries, terminals and other distribution points.
Importance of the Colex Terminal
The Colex terminal serves as a critical storage and distribution hub in the Houston Ship Channel area. This provides storage capacity for a variety of petroleum products, including crude oil, gasoline and chemicals. The terminal's strategic location and capacity make this a valuable asset for companies operating in the region, supporting the efficient flow of energy products in and out of the Houston area.
Shell’s Continued Presence in the U.S. Energy Market
Despite the sale of the Sinco pipeline system and Colex terminal, Shell remains a significant player in the U.S. energy market. The company has interests in all 50 states and employs more than 13,000 people across the country. Shell's U.S. portfolio includes oil, natural gas, petrochemicals, lubricants and refined fuel products, as well as renewables such as wind and solar energy.
Commitment to Renewable Energy
Shell’s "Powering Progress" strategy emphasizes the company's commitment to renewable energy and sustainability. As part of this strategy, Shell is investing in wind, solar and electric vehicle charging infrastructure. These investments are designed to support the transition to a lower-carbon future while continuing to meet the energy needs of today.
Prospect for Shell in the United States
As Shell continues to streamline its portfolio, the company is well-positioned to focus on high-value projects that align with its long-term goals. The sale of non-strategic assets like the Sinco pipeline system and Colex terminal allows SHEL to concentrate on areas that will drive growth and sustainability.
Conclusion
This strategic divestiture allows Shell to re-deploy capital to projects that align with its strategy while ensuring that these critical assets continue to operate effectively under the ownership of Edgewater Midstream LLC. As Shell moves forward, its continued commitment to innovation, sustainability and operational excellence will shape its future in the U.S. energy market.
Houston, TX-based Vaalco Energy is valued at $675.37 million. The oil and gas exploration and production company currently pays a dividend of 25 cents per share, or 3.84%, on an annual basis. EGY is an independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
TechnipFMC is valued at $11.5 billion. The company currently pays a dividend of 20 cents per share, or 0.75%, on an annual basis. TechnipFMC plc engages in energy projects, technologies and systems and services businesses in Europe, Central Asia, North America, Latin America, the Asia Pacific, Africa, the Middle East and internationally. It operates through two segments: Subsea and Surface Technologies.
Findlay, OH-based MPLX LP is valued at $43.76 billion. In the past year, its shares have risen 20.4%. MPLX owns and operates midstream energy infrastructure and logistics assets in the United States. It operates under two segments, namely Logistics and Storage, and Gathering and Processing.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Shell to Sell Sinco Pipeline and Colex Terminal to Edgewater
Shell plc’s (SHEL - Free Report) subsidiary, Shell USA, Inc., has announced that its both units, Shell Pipeline Company LP and Triton West LLC, will sell the entire stake in the Sinco pipeline system and Colex terminal to a subsidiary of Edgewater Midstream LLC (Edgewater), Houston, TX-based midstream company.
This strategic divestiture is aligned with Shell's ongoing efforts to simplify its portfolio and focus on more value-driven projects with lower emissions. The sale is subject to regulatory approval and expected to be completed in the fourth quarter of 2024, following Shell's previous sale of its equity in Deer Park Refinery. This sale rendered the Sinco pipeline and Colex terminal non-integrated and non-strategic within the company's broader "Powering Progress" strategy.
Shell’s Strategic Shift Toward Simplification
Shell's decision to sell the Sinco pipeline system and Colex terminal is part of a broader strategy aimed at optimizing its portfolio. This move reflects Shell's commitment to delivering more value while reducing its environmental footprint. According to Andrew Smith, Shell’s executive vice president of Trading & Supply, "This sale follows our guidance at Shell´s Capital Markets Day to continue to simplify our portfolio as we seek to deliver more value, with less emissions."
Impact on Shell’s Portfolio
The Sinco pipeline system and Colex terminal have been operated as integrated assets with the Deer Park Refinery. However, the sale of Shell's equity in Deer Park Refinery to Pemex in 2022 changed the strategic importance of these assets. With the Deer Park Refinery no longer part of Shell's portfolio, the Sinco pipeline and Colex terminal became non-integrated, making them less critical to Shell's operations.
Re-deployment of Capital
The proceeds from the sale will enable Shell to re-deploy capital to other projects that align more closely with its "Powering Progress" strategy. This strategy focuses on generating more value with fewer emissions, reinforcing Shell's commitment to sustainability and innovation in energy production.
Edgewater Midstream LLC: A Strategic Buyer
Edgewater Midstream LLC, the buyer of the Sinco pipeline system and Colex terminal, is a company focused on acquiring, developing and operating pipelines and terminals. Edgewater’s assets are strategically located near major petroleum trading hubs and demand centers in North America, primarily in coastal markets. This acquisition aligns with Edgewater’s strategy to expand the company’s footprint in key energy markets.
Edgewater’s Operational Expertise
Edgewater’s expertise in operating pipelines and terminals will be instrumental in maximizing the value of the Sinco pipeline system and Colex terminal. The company’s focus on strategic locations and efficient operations positions it as a capable steward of these assets, ensuring Edgewater’s continued contribution to the energy infrastructure in the Houston Ship Channel area.
Strategic Fit With Edgewater’s Portfolio
The addition of the Sinco pipeline system and Colex terminal to Edgewater’s portfolio enhances the company’s ability to serve key markets in North America. These assets are located in the Houston Ship Channel area, a key hub for petroleum trading and transportation. By acquiring these assets, Edgewater is poised to strengthen the company’s presence in one of the most important energy markets in the United States.
Significance of the Houston Ship Channel
The Houston Ship Channel is an important artery for the energy industry in the United States. It is one of the busiest shipping lanes in the world, facilitating the transportation of petroleum products, chemicals and other goods. The Sinco pipeline system and Colex terminal, located in this region, play a crucial role in the efficient movement of energy products to and from the Houston area.
Role of the Sinco Pipeline System
The Sinco pipeline system is a key component of the energy infrastructure in the Houston Ship Channel. The system transports crude oil, gasoline and other petroleum products through a vast network of pipelines, ensuring the reliable delivery of these essential products to refineries, terminals and other distribution points.
Importance of the Colex Terminal
The Colex terminal serves as a critical storage and distribution hub in the Houston Ship Channel area. This provides storage capacity for a variety of petroleum products, including crude oil, gasoline and chemicals. The terminal's strategic location and capacity make this a valuable asset for companies operating in the region, supporting the efficient flow of energy products in and out of the Houston area.
Shell’s Continued Presence in the U.S. Energy Market
Despite the sale of the Sinco pipeline system and Colex terminal, Shell remains a significant player in the U.S. energy market. The company has interests in all 50 states and employs more than 13,000 people across the country. Shell's U.S. portfolio includes oil, natural gas, petrochemicals, lubricants and refined fuel products, as well as renewables such as wind and solar energy.
Commitment to Renewable Energy
Shell’s "Powering Progress" strategy emphasizes the company's commitment to renewable energy and sustainability. As part of this strategy, Shell is investing in wind, solar and electric vehicle charging infrastructure. These investments are designed to support the transition to a lower-carbon future while continuing to meet the energy needs of today.
Prospect for Shell in the United States
As Shell continues to streamline its portfolio, the company is well-positioned to focus on high-value projects that align with its long-term goals. The sale of non-strategic assets like the Sinco pipeline system and Colex terminal allows SHEL to concentrate on areas that will drive growth and sustainability.
Conclusion
This strategic divestiture allows Shell to re-deploy capital to projects that align with its strategy while ensuring that these critical assets continue to operate effectively under the ownership of Edgewater Midstream LLC. As Shell moves forward, its continued commitment to innovation, sustainability and operational excellence will shape its future in the U.S. energy market.
Zacks Rank and Key Picks
Currently, SHEL has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like VAALCO Energy, Inc. (EGY - Free Report) , TechnipFMC plc (FTI - Free Report) and MPLX LP (MPLX - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based Vaalco Energy is valued at $675.37 million. The oil and gas exploration and production company currently pays a dividend of 25 cents per share, or 3.84%, on an annual basis. EGY is an independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
TechnipFMC is valued at $11.5 billion. The company currently pays a dividend of 20 cents per share, or 0.75%, on an annual basis. TechnipFMC plc engages in energy projects, technologies and systems and services businesses in Europe, Central Asia, North America, Latin America, the Asia Pacific, Africa, the Middle East and internationally. It operates through two segments: Subsea and Surface Technologies.
Findlay, OH-based MPLX LP is valued at $43.76 billion. In the past year, its shares have risen 20.4%. MPLX owns and operates midstream energy infrastructure and logistics assets in the United States. It operates under two segments, namely Logistics and Storage, and Gathering and Processing.