Shell service station near lost hills, California, United States.
New York, U.S. (Reuters) – Royal Dutch Shell Plc wants to sell a stake in a key U.S. Gulf Coast crude oil pipeline for as much as $1 billion and is working with Barclays Plc to solicit offers, a source familiar with the matter said on Tuesday.
Shell recently reversed the 360,000-barrels-per-day pipeline known as Ho-Ho that flows from Houston, Texas to Houma, Louisiana. The reversal and start of operations last month are expected to relieve a glut of crude oil in the Houston area.
Shell wants to sell a stake of up to $1 billion in the pipeline worth as much as $3 billion to recoup the costs of reversing the flow and get cash to invest in more valuable drilling projects, Bloomberg reported earlier, citing several sources.
Shell declined to comment.
Earlier this month, Shell issued a “significant” profit warning for the fourth-quarter, saying earnings excluding identified items on a current cost of supplies would be $2.9 billion against market expectations of about $4 billion.
Analysts said poor refining margins, high production costs, outages and a lower Australian dollar contributed to the new forecast, which would be the lowest since 2009.
