Houston-based Shell US Gas & Power LLC announced Friday it has put its Gulf of Mexico natural gas pipeline business unit, Shell Gas Transmission LLC, on the sale block. The unit owns or has an interest in 17 major offshore gas pipes in operation or under construction, with total capacity of about 9 Bcf/d.

Shell, which did not disclose a sale price, said the decision was made as part of parent company’s Royal Dutch/Shell Group’s ongoing program of portfolio rationalization. The company said it wants to sell the assets as a package, but may consider separate sales.

Assets on the block are located in the western, central and eastern segments of the offshore production area. An information memorandum for prospective buyers will be issued in May, and the sale of the assets is expected to be completed by year-end 2004. Some of the Shell Gas Transmission pipelines serving Shell production facilities will not be included in the sale, but the location of those pipes was not disclosed.

“Shell Gas Transmission’s extensive natural gas pipeline network is well positioned in all producing corridors in the Gulf of Mexico,” said Gus Noojin, CEO of Shell US Gas & Power. “However, as part of ongoing portfolio review, it was determined that Shell’s Gulf of Mexico business objectives do not require all gas infrastructure to be owned and operated by Shell.”

Shell Gas Transmission’s assets include Garden Banks Gas Pipeline, Mississippi Canyon Gas Pipeline, Nautilus Pipeline Co., Manta Ray Offshore Gathering Co., Stingray Pipeline Co. and Destin Pipeline Co.

Garden Banks, which has a 1 Bcf/d of capacity, is a 30-inch pipe that is 50 miles long and interconnects with four existing interstate pipes that move gas onshore. It is 80% owned by Enchilada Gas Pipeline LLC and 20% by Hess Garden Banks Gas Gathering Inc. Mississippi Canyon is 100% owned by Shell Gas Transmission. Its capacity is 800 MMcf/d, is 45 miles long and interconnects with the Venice Gas Plant and three interstate pipes, Tennessee Gas, Southern Natural and Texas Eastern.

Nautilus is 50% owned by Shell; another 25% each is owned by Marathon Oil and Enterprise Energy Partners. Its capacity is 600 MMcf/d, and it extends 101 miles to interconnect with four interstate pipes: Texas Gas Transmission, Gulf South (Koch), Tennessee Gas and American Natural Resources. It also connects to three intrastate pipes: Cypress, Acadian and Louisiana Intrastate Gas.

Manta Ray is a large offshore gathering system composed of three main legs, the Bullwinkle Pipe, Boxer Lateral and East Lateral. It is 50% owned by Shell, the other partners are Marathon Oil and Enterprise Energy, which both own 25%. It has an 800 MMcf/d capacity, and its delivery points are American Natural, Nautilus, Transcontinental and Trunkline.

Stingray is 100% owned by Starfish Pipeline, a partnership that is 50% owned by Shell and 50% by Enterprise Products Operating LP. It transports gas and injected condensate from 56 fields offshore, with 1.2 Bcf/d of capacity and two compressor stations totaling 45,000 horsepower. It is 325 miles long, with key shippers that include Kerr-McGee, Amerada Hess, Devon, LLog, Unocal and the Minerals Management Service.

Destin is 33% owned by Shell Destin LLC; Amoco Destin Pipeline Co. owns 67%. It carries 1.2 Bcf/d and is 255 miles long, with interconnections to six major gas pipelines: Gulf South, Gulfstream, Florida Gas Transmission, Transcontinental, Tennessee Gas and Southern Natural.

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