Edgewater Midstream LLC, Houston, a portfolio company of EnCap Flatrock Midstream, has agreed to acquire the 100% interest in the Sinco pipeline system and the Colex East and Colex West terminals in the Houston refining corridor from Shell Pipeline Co. LP and Triton West LLC, respective subsidiaries of Shell USA Inc. A purchase price was not disclosed.
The Sinco pipeline system includes a series of intrastate refined products pipelines connecting the Deer Park refinery complex to the Colex East and Colex West terminals, along with various other refined products and crude oil terminals along the Houston Ship Channel, Edgewater Midstream said in a release Sept. 4.
With about 3 million bbl of motor fuels storage capacity, the Colex East and Colex West terminals also include a connection at the origin of the Colonial Pipeline, providing a direct conduit into the largest refined products pipeline in the US, and a connection to the Explorer Pipeline which delivers refined products from the US Gulf Coast to Midwest markets, the company continued.
The Sinco pipeline system and the Colex terminal have historically been operated as integrated assets with the Deer Park refinery, Shell said in a separate release Aug. 29 noting the deal.
In 2022, Shell completed the sale of its equity share in the refinery to Pemex, rendering the pipeline and the terminal non-strategic and non-integrated, it said (OGJ Online, Jan. 21, 2022).
“After the completion of the sale of Shell’s equity in Deer Park refinery, these assets are non-integrated and no longer fit,” within Shell’s strategy, said Andrew Smith, Shell executive vice-president of trading and supply, and that the deal with Edgewater Midstream follows the company’s plan to simplify the portfolio, enabling redeployment of capital to other projects, Smith continued.
Subject to regulatory approvals, the transaction is expected to close in fourth-quarter 2024.
