Crestwood Equity Partners LP closed the previously announced equity option agreement with Shell Midstream Partners LP for a 50% stake in Crestwood Permian Basin LLC which owns the Nautilus gas gathering system. The other 50% equity interest will continue to be owned by Crestwood Permian Basin Holdings LLC.
The Nautilus system gathers the majority of Shell’s operated Delaware Basin gas under a 20-year tiered, fixed-fee contract, according to an Oct. 18 news release.
Crestwood expects to use proceeds from the transaction for on-going growth project reinvestment and reducing revolver debt.
Crestwood Permian Basin Holdings is a joint venture between Crestwood Equity Partners and First Reserve Corp.
Shell Midstream Partners is a master limited partnership formed by Royal Dutch Shell plc. The transaction marks Shell's entry into the Permian Basin and reflects a strategy to maximize what company executives called the "cornerstone" of Royal Dutch Shell plc's shale assets.