Shell sells stake in Colonial Enterprises to Brookfield for $1.45 billion

[UNITED STATES] Shell has agreed to sell its 50% stake in Colonial Enterprises, a subsidiary that holds a network of critical U.S. energy assets, to Brookfield Infrastructure Partners for a total of $1.45 billion. The deal, which is expected to close in the second half of 2025, marks a major move as Shell continues to focus on its core operations and align with its long-term strategy to reduce exposure to non-core businesses.

A Strategic Move Amid Reshaping Energy Priorities

The sale of its interest in Colonial Enterprises is in line with Shell's broader strategy to simplify its portfolio and strengthen its position in renewable energy and low-carbon technologies. Over the past few years, Shell has been divesting assets that do not directly contribute to its clean energy transition goals, with this sale being the latest in a series of such moves.

"We are committed to reshaping our business and driving growth in areas that are aligned with our strategy for a net-zero emissions future. The sale of our stake in Colonial Enterprises is a further step in that direction," said Shell CEO, Ben van Beurden, in a statement.

Colonial Enterprises, through its ownership in Colonial Pipeline, operates one of the largest refined products pipelines in the United States. The pipeline system spans over 5,500 miles, delivering petroleum products to a significant portion of the U.S. East Coast. The assets involved in this deal are key to U.S. energy infrastructure, making the sale a notable development in the energy sector.

Brookfield's Strategic Investment

Brookfield Infrastructure Partners, a global leader in infrastructure investment, is acquiring Shell's stake in Colonial Enterprises through its renewable energy and infrastructure arm. The firm has been actively expanding its presence in energy assets and sees this acquisition as an opportunity to deepen its portfolio in critical U.S. infrastructure, particularly in the energy transition space.

“This acquisition enhances our portfolio by adding long-duration, stable cash flow-generating assets in a critical part of the North American energy infrastructure,” said Sam Pollock, CEO of Brookfield Infrastructure. “We look forward to working with Colonial Enterprises to continue providing safe and reliable energy services while exploring opportunities for growth in the rapidly evolving energy landscape.”

The transaction is subject to regulatory approval, which is expected to be granted in the coming months. Once finalized, Brookfield will assume full control of the Colonial Enterprises network, bringing its extensive experience in managing large-scale infrastructure projects to the U.S. energy sector.

Impact on U.S. Energy Markets

Colonial Pipeline plays a pivotal role in transporting gasoline, diesel, jet fuel, and other refined products to more than 50 million people across the southeastern U.S., making it a crucial asset in the country’s energy supply chain. Despite the changing dynamics in energy production and consumption, the demand for pipeline infrastructure remains strong, particularly in transporting products from refineries to key markets.

However, the deal also highlights the ongoing shift in the energy market, as traditional oil and gas companies, like Shell, continue to retreat from certain non-core assets. In recent years, Shell has accelerated its focus on green energy investments, such as wind, solar, and hydrogen. The sale to Brookfield further underscores the growing trend of infrastructure funds and private equity firms taking a larger role in the ownership of energy infrastructure.

Shell’s Continued Commitment to Net-Zero

Shell’s divestment from Colonial Enterprises does not signal a retreat from the U.S. market. The company continues to hold significant investments in U.S. renewable energy, particularly in wind and solar power. In 2023, Shell committed to investing up to $25 billion in green energy projects globally, with a substantial portion of that funding directed toward clean energy development in the United States.

"We are investing in energy solutions that will help us reach our net-zero emissions targets by 2050. Our focus on renewable energy and carbon-neutral technologies is a critical part of our ongoing transformation," said van Beurden.

In addition to renewable energy projects, Shell is also prioritizing investments in carbon capture and storage (CCS) technologies and green hydrogen. These efforts align with its goal to reduce reliance on fossil fuels and support the transition to a low-carbon economy.

Looking Ahead: A Changing Energy Landscape

The sale to Brookfield represents a broader trend in the energy sector, where infrastructure investors are increasingly taking over assets traditionally owned by oil and gas majors. As the industry continues to adapt to global energy demands, this deal underscores the ongoing shift towards sustainability and the growing importance of infrastructure funds in shaping the future of energy.

For Shell, the deal is another step in its transformation as a global energy leader focused on clean energy innovation. For Brookfield, it represents an opportunity to capitalize on critical infrastructure that is integral to U.S. energy security.

The transaction will also have implications for the U.S. energy landscape, as more private sector players become involved in managing vital infrastructure assets. This change may introduce new efficiencies, investments, and opportunities for modernization, particularly as the nation moves toward cleaner energy solutions.

The $1.45 billion sale of Shell's interest in Colonial Enterprises to Brookfield marks a significant milestone in Shell’s ongoing transformation toward a low-carbon future. While the deal signals a shift in ownership of critical U.S. energy infrastructure, it also reflects broader trends in the industry as companies navigate the transition to more sustainable energy sources. With Brookfield’s expertise in managing infrastructure, the sale could enhance the resilience and efficiency of U.S. energy supply chains, further driving the evolving energy landscape.