Brookfield Infrastructure Partners LP and its institutional partners have agreed to acquire Colonial Enterprises Inc., the operator of the largest fuel pipeline in the United States, in a transaction valued at $9 billion.

The deal will see Brookfield take ownership of the 5,500-mile Colonial Pipeline, which runs from Texas to New Jersey and serves as the primary source of gasoline, diesel, and jet fuel for the East Coast. 

The pipeline was notably shut down for five days in 2021 following a cyberattack that caused fuel shortages across the region.

As announced last week, colonial’s five current owners are selling their entire stakes. This includes a Shell plc unit, which will transfer its 16.125% interest for $1.45 billion. 

The other sellers include industrial conglomerate Koch Inc. (28.1%), a unit of private equity firm KKR & Co. (23.4%), Canadian pension fund Caisse de Depot et Placement du Quebec (16.5%), and infrastructure owner IFM Investors Pty (15.8%). Shell’s Midstream Operating unit will also sell its stake to a Brookfield affiliate named Colossus AcquireCo. 

The acquisition comes amid efforts by the current administration to expand domestic energy infrastructure. 

Currently, building new pipelines in the U.S. faces significant regulatory and permitting challenges, making new pipelines more valuable. 

Bloomberg News had reported in March that Brookfield was the leading contender to acquire Colonial.

The transaction is anticipated to close in the fourth quarter. Morgan Stanley and Mizuho Bank Ltd. led the debt financing for the deal, with Jefferies, Greenhill & Co., and Morgan Stanley serving as Brookfield's financial advisors. Kirkland & Ellis LLP provided legal counsel.

Brookfield has a history of investing in global pipeline assets, including a controlling stake in Brazil’s NTS pipeline and its participation in a consortium that acquired a $10.1 billion stake in Abu Dhabi’s natural gas pipelines in 2020.