Brookfield Leading Race to Acquire US$10 Billion Colonial Pipeline

Despite Donald Trump’s push to expand domestic energy infrastructure, building new oil and natural gas pipelines remains difficult

Brookfield Asset Management Ltd. is emerging as the front-runner to acquire Colonial Pipeline Co., people familiar with the matter said.

The investment firm is seen as the strongest contender after final offers were submitted last week, advancing past rival infrastructure funds and potential strategic buyers, according to the people. A deal could value Colonial Pipeline at US$10 billion or more including debt, they said.

Based in Alpharetta, Georgia, Colonial operates the largest United States fuel pipeline system with a network covering more than 5,500 miles from Houston to New Jersey. The company is owned by subsidiaries of private equity firm KKR & Co., Canadian pension fund Caisse de Dépôt et Placement du Québec, oil major Shell Plc, infrastructure owner IFM Investors Pty and industrial conglomerate Koch Inc.

Bloomberg News reported in October that Colonial is weighing options, including a potential sale.

Deliberations are ongoing and no final decisions have been taken, the people said, asking not to be identified because the information is private. Some of Colonial Pipeline’s backers could opt to retain stakes in any deal, the people said. Representatives for Brookfield, Colonial, KKR, CDPQ and Shell declined to comment. Spokespeople for IFM and Koch didn’t immediately respond to requests for comment.

Despite U.S. President Donald Trump’s push to expand domestic energy infrastructure, building new oil and natural gas pipelines in the U.S. remains difficult amid legal challenges, a slow federal permitting process and political opposition in Democrat-led states.

When Colonial’s network was constructed in the 1960s, it took 18 months to permit, build and start operations “and today we can’t get a permit in 18 months,” chief executive Melanie Little said during the CERAWeek by S&P Global conference this month. “You could not replicate the Colonial pipeline system today.”

Brookfield has previously invested in large pipeline assets globally. It owns a controlling stake in Brazil’s NTS pipeline that spans more than 2,000 kilometers and connects key markets in Brazil, including São Paulo, Rio de Janeiro and Minas Gerais. The asset manager was also part of a consortium that bought a a US$10.1 billion stake in Abu Dhabi’s natural-gas pipelines in 2020.

—With assistance from Paula Sambo, Gillian Tan, Kiel Porter and Mitchell Ferman.