Key facts
- Shell and Phillips 66 are considering selling their stakes in the Explorer refined products pipeline.
- The potential sale could value the pipeline at approximately $3.5 billion.
- Greenhill and RBC Capital Markets have been hired to manage the sale process.
- Energy Transfer and MPLX are the other stakeholders in the Explorer pipeline.
- The Explorer pipeline transports gasoline, jet fuel, and other products across more than 1,800 miles.
Shell and Phillips 66 are reportedly exploring the sale of their stakes in the Explorer refined products pipeline, a significant piece of U.S. energy infrastructure. The potential deal could value the pipeline at around $3.5 billion, driven by strong demand for such assets from financial buyers seeking steady cash flows.
Investment banks Greenhill and RBC Capital Markets have been engaged to manage an auction process for the stakes, though discussions are in their early stages. Shell and Phillips 66 collectively own approximately 61% of the entity that holds the pipeline, which stretches over 1,800 miles and transports gasoline, jet fuel, and other products from Texas through the Midwest to the outskirts of Chicago.
Energy Transfer and MPLX are the other owners of the Explorer pipeline. While the current focus is on the Shell and Phillips 66 stakes, there is a possibility that the other stakeholders could also offer their holdings if there is significant interest in acquiring the entire pipeline. This mirrors the recent sale of the Colonial pipeline, which was sold to Brookfield Infrastructure Partners after its initial owners put their stakes up for auction.
Sources cautioned that there is no certainty a deal will be reached. Shell, Phillips 66, and MPLX declined to comment, while Explorer, Energy Transfer, Mizuho, and RBC did not respond to requests for comment.