Brookfield Asset Management is nearing completion a deal to acquire Colonial Pipeline, the largest U.S. fuel transportation system, for more than $9 billion including debt, reported Reuters this week.
“The New York-based asset manager has emerged as the winner of the auction process, which the five owners of the pipeline have been running over several months, [anonymous] sources said… A deal between Brookfield and the owners could be formally announced in the coming weeks, barring any last-minute snags, the sources added,” wrote the outlet.
This morning, Shell Midstream Operating LLC, a subsidiary of Shell plc (“Shell”), agreed to sell its 16.125% interest in the pipeline to Brookfield for $1.45 billion, according to a press release.
“This divestment reflects our focus on performance, discipline and simplification,” said Andrew Smith, president of Shell trading & supply. “It will allow us to concentrate on areas where we have scale and competitive advantage."
The transaction is subject to regulatory approvals and is expected to close in Q4 2025.
Colonial's pipeline system stretches over 5,500 miles from Houston, Texas to New York's harbor. It moves more than 100 million gallons of fuel daily, including gasoline, jet fuel, diesel and heating oil, according to its website.
“CDPQ bought its stake in Colonial for $850 million in 2012 from ConocoPhillips. IFM Investors and KKR acquired their respective 15.8% and 23.4% holdings in 2007 and 2010. Shell consolidated its 16.13% into a single holding in 2019, while a subsidiary of Koch Industries has held its current 28.1% position since 2003.”
Bloomberg reported in March that Brookfield was leading the race to acquire Colonial Pipeline for more than $10 billion. “Despite U.S. President Donald Trump’s push to expand domestic energy infrastructure, building new oil and natural gas pipelines in the U.S. remains difficult amid legal challenges, a slow federal permitting process and political opposition in Democrat-led states,” wrote Bloomberg.
When Colonial’s network was constructed in the 1960s, it took 18 months to permit, build and start operations “and today we can’t get a permit in 18 months,” Chief Executive Officer of Colonial Pipeline Company Melanie Little said during the CERAWeek by S&P Global conference this month. “You could not replicate the Colonial pipeline system today.”
Read NACS’ “The History of Fuel Retailing” to learn about other significant happenings in fuel retailing.