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Shell to drop down 2 pipeline stakes to MLP for $350M

willacquire an additional 20% equity interest in Mars Oil Pipeline Co. and a 49%equity interest in OdysseyPipeline LLC from Royal Dutch Shell plc for $350 million.

Thedrop down will be funded with cash on hand and borrowings under ShellMidstream's credit facilities, according to a Sept. 27 news release. Thetransaction is expected to be immediately accretive to unitholders and isexpected to close on Oct. 3.

The600,000 barrel per day Mars Oil Pipeline delivers crude from the Mars Basin andthe Amberjack system into LOOP's Clovelly facility. Meanwhile, has 220,000 bbl/d ofcapacity that transports from the eastern Gulf of Mexico to the Delta Pipelinesystem, enabling deliveries to refineries in Louisiana and Mississippi.

"BothMars and Odyssey build on our key corridor pipeline strategy in the Gulf ofMexico and are advantageously positioned to continue to capture growth ofoffshore volumes along our footprint of assets," Shell Midstream CEO JohnHollowell said in a statement.

Theterms of the acquisition were approved by the Conflicts Committee of the Boardof Directors of Shell Midstream's general partner. Evercore Group LLC served asthe financial adviser and Akin Gump Strauss Hauer & Feld LLP served as thelegal adviser of the committee.