Shell Energy North America (US), L.P. (SENA), a subsidiary of Shell, has signed two transactions as part of its ongoing management of its US power portfolio:
- The acquisition of 100% equity in Hunlock Creek Generating LLC (Hunlock), which owns 169 megawatts (MW) of natural gas-fired generation capacity in Pennsylvania.
- The sale of interests in RISEC Holdings, LLC (RISEC) to Constellation Energy Generation, LLC for $715 million. RISEC owns a 609-MW, two-unit combined cycle gas turbine power plant that serves the New England power market.
'These transactions reflect our dynamic approach to managing our trading portfolio,' said Andrew Smith, Shell's President of Trading & Supply. 'We selectively invest in assets that strengthen our market position and create value, while remaining ready to realize value when market conditions present attractive opportunities.'
The acquisition of Hunlock strengthens Shell’s position in the PJM power market
The acquisition secures supply and capacity offtake for SENA in the Mid-Atlantic power grid operated by PJM Interconnection, the largest wholesale electricity market and grid operator in the USA.
Hunlock and its subsidiary own 169 MW of natural gas-fired generation capacity in Pennsylvania. The asset further strengthens SENA's position in the PJM market through access to flexible gas-fired generation and reinforces Shell's continued focus on investing in assets that complement its trading capabilities.
The sale of RISEC enables Shell to realize significant value on an accelerated timeline
SENA’s earlier acquisition of RISEC ensured continued access to the plant's capacity and associated trading opportunities in the market, enabling SENA to deliver substantial value as part of its asset-backed trading portfolio. With this transaction, SENA will bring forward the return it expected to generate from its longer-term ownership through a significant gain on the sale.
Both transactions are subject to regulatory approvals and are expected to close in the first quarter of 2027.
Background
- SENA’s focus is on power markets where it can play to its strengths, including trading and optimization, backed by increased access to battery energy storage systems and flexible power plants.
- PJM Interconnection manages the movement of electricity across 13 US states and the District of Columbia, serving more than 65 million people.
- SENA has maintained an energy conversion agreement with RISEC for the plant's full electricity output since 2019, which will terminate upon completion of the transaction.
- Hunlock’s portfolio includes a two-unit, 125-MW combined-cycle power plant and a 44-MW simple-cycle peaking plant. Hunlock is currently owned by Riverview Power Holdings LLC, an indirect subsidiary of Castleton Commodities International LLC.
- The Hunlock acquisition is projected to generate returns that exceed Shell’s investment requirements for its power business as outlined at Shell’s Capital Markets Day in 2025.
- SENA is a leading full-service energy company providing a comprehensive suite of solutions to commercial and industrial customers across wholesale and retail power, natural gas and environmental products markets. Headquartered in Houston, Texas, with regional hubs across North America, SENA has been active in energy markets for more than 25 years and owns gas-fired generation in some of the largest power markets in the United States.
Source: Shell
