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Shell to sell stake in Amberjack oil pipeline to its MLP for $1.22B

Shell Midstream Partners LP agreed to purchase Royal Dutch Shell plc's ownership stake in Amberjack Pipeline Co. LLC, composed of 75% of Amberjack series A and 50% of Amberjack series B shares, for $1.22 billion.

The Amberjack crude oil pipeline, which connects the Gulf of Mexico with delivery points along the Texas and Louisiana coast, moves about 300,000 barrels per day and is expected to transport about 400,000 bbl/d by the end of 2019 through in-field development and expected new projects, according to a May 10 news release. Shippers can transport four crude grades through deliveries into multiple pipelines.

The master limited partnership estimated its share of Amberjack's annualized net income at $120 million and expects that figure to grow to about $145 million by the end of 2018, with a related quarterly dividend of about $40 million.

The deal, Shell Midstream's largest acquisition, is expected to close on or about May 11.

Amberjack Pipeline is a joint venture between Shell and Chevron Corp.'s Chevron Pipe Line.