The acquisition price, including a proportional share of Poseidon debt, reflects and approximate 9.5 times multiple of the asset’s forecasted next twelve months adjusted earnings before interest, taxes, depreciation and amortization plus capacity reserve payments. The acquisition is expected to be immediately accretive to unitholders. In addition to the acquisition, Shell Midstream Partners entered into a new one-year revolving credit facility with $100 million of initial availability with an affiliate, increasing total borrowing capacity to $500 million. The acquisition was funded with borrowings under Shell Midstream Partners’ revolving credit facilities.

"This marks the second acquisition by Shell Midstream Partners following the initial public offering. As previously communicated, we have begun to introduce new assets into the MLP in order to diversify our cash flow base and highlight the sizeable inventory of assets at our Sponsor," said Peggy Montana, member of the board of directors of the general partner. "Poseidon is a key corridor pipeline for producers with close proximity to existing and future developments in the Central and Western Gulf of Mexico to serve both Texas and Louisiana markets. Poseidon’s strong growth profile makes the asset a highly valuable addition to the Shell Midstream Partners’ portfolio."

Highlights of Poseidon:

Proprietary (non-FERC) 367-mile offshore crude oil pipeline with 350,000 barrels per day capacity transporting to key markets in Texas and Louisiana
Ownership of strategic platform South Marsh Island 205
Access to major crude trading hubs via connecting carriers i.e. Gibson/Houma to St James, LA and Clovelly, LA and via Cameron Highway Oil Pipeline System to Texas Hubs (Texas City, Port Arthur)

The terms of the acquisition were approved by the conflicts committee of the Board of Directors of the General Partner of Shell Midstream Partners, which is comprised entirely of independent directors. This committee was advised by Evercore Group, L.L.C. as to financial matters and Andrews Kurth LLP as to legal matters.