Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.


3 Cheap Stocks to Surge in a Market Crash

Boring, Predictable, No-Surprises Strategy Safely Generates $67,548Veteran economist Dr. Stephen Leeb has just released a new report detailing his top 3 stocks to survive an inflation-driven market correction. They include precious metal and copper miners sitting on reserves that could send their share prices up 3,886%, as well as a water infrastructure company with a global footprint in developing regions.
Click here to learn more.


Shell’s Midstream Spinoff Set to Swell

By Robert Rapier on October 28, 2014

One of the most anticipated master limited partnership (MLP) offerings of the year debuts this week. Shell Pipeline Company (SPLC), a midstream subsidiary of Royal Dutch Shell (NYSE: RDS-A) recently formed Shell Midstream Partners (which will trade as SHLX), and units are expected to price late on Oct. 28 with trading kicking off the next morning.

Shell Midstream Partners intends to grow by acquiring more of Shell’s extensive portfolio of midstream assets, investing in expansion projects and potentially pursuing strategic acquisitions of assets from third parties. Most future growth will probably come from further dropdowns of Shell’s midstream assets.

The impending IPO was covered in some detail in the Aug. 11 issue of MLP Profits (“Shell Sells Pipelines by the Seashore.”) With this offering, Shell becomes the first major integrated oil and gas company to launch an MLP. Initial assets of Shell Midstream Partners will include interests in two refined products pipelines and two crude oil pipelines:

  • A 49% interest in Bengal Pipeline Company, which owns a refined products pipeline that connects four refineries in Louisiana

  • A 1.612% ownership interest in Colonial Pipeline Company, which runs a major finished product line connecting the Gulf Coast to the East Coast

  • A 43% interest in Zydeco Pipeline Company, which will own the Houston-to-Houma crude oil pipeline system

  • A 28.6% interest in Mars Oil Pipeline Company, which owns the Mars crude oil pipeline

The Bengal Pipeline is operated by SPLC and connects four refineries in Louisiana with the Plantation and Colonial pipelines, providing market outlets to the East Coast. Colonial Pipeline Company (Colonial) operates the largest refined products pipeline in the United States, traversing 11 states across the southeast and eastern seaboard. Colonial transports more than 100 million gallons per day of refined products, or approximately 50% of refined petroleum products consumed in the East Coast region of the United States, through its 5,500-mile system.

Zydeco Pipeline Company (Zydeco) is currently owned by SPLC. Zydeco will own the Houston-to-Houma Louisiana crude oil pipeline system (Ho-Ho). The Mars Oil Pipeline Company (Mars) operates a major crude oil pipeline in the offshore Gulf of Mexico, originating approximately 130 miles offshore and terminating in salt dome caverns in Clovelly, Louisiana.

The IPO aims to raise approximately $750 million with 37.5 million shares priced between $19 and $21, which would provide an annualized yield of 3.25% at the midpoint. The most recent market talk had shares pricing at $22 or higher.  

While that would push prospective yield below 3%, Shell has a very large portfolio of midstream assets that can drive the growth of the partnership for many years to come. Demand for this IPO is expected to be strong, so expect an opening well above the indicated price range. This will likely be a good long-term portfolio holding for MLP investors, but it is much more appealing for the potential capital appreciation than for investors seeking income.

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)

You might also enjoy…


R.I.P Bull Market—Here’s How To Protect Your Wealth

I hope you’ve enjoyed the phenomenal bull market of the past eight years…

Because it’s about to come to a screeching halt.

The Federal Reserve’s nearly decade-long spending spree has finally come to an end.

With no other options left at their disposal, the Fed has no other choice than to raise interest rates to keep inflation in check.

And that leaves you with two options…

Do nothing and suffer the agony of watching the profits you’ve accumulated over the years evaporate right before your eyes…

Or reposition your portfolio and invest in companies which prosper as inflation rises and interest rates soar.

I think the choice is clear. And I’ll show you the best new positions you can take if you click here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.