Recasts, adds background throughout

April 3 (Reuters) - Brookfield Infrastructure Partners BIP.N is buying Colonial Pipeline, the largest U.S. fuel transportation system, in a deal valued at about $9 billion, including debt, the company said on Thursday.

The deal to acquire all assets of Colonial Enterprises, including Colonial Pipeline, is expected to close in the second half of 2025.

Colonial's pipeline system stretches over 5,500 miles from Houston in Texas to New York's harbor. It moves 100 million gallons of fuel daily, including gasoline, jet fuel, diesel and heating oil, according to its website.

The flagship listed infrastructure company of Brookfield Asset Management BAM.TO will have an equity investment of $500 million in Colonial Enterprises at the deal's closing.

Shell SHEL.L said late on Thursday it was selling its interest in Colonial Enterprises to Colossus AcquireCo, a Brookfield subsidiary, for $1.45 billion.

Colonial's owners - including Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), Shell, and investment firm KKR KKR.N - had begun exploring a sale of Colonial Pipeline last year.

CDPQ bought its stake in Colonial for $850 million in 2012 from ConocoPhillips COP.N. IFM Investors and KKR acquired their respective 15.8% and 23.4% holdings in 2007 and 2010.

Shell consolidated its 16.13% into a single holding in 2019, while a subsidiary of Koch Industries has held its current 28.1% position since 2003.

Reuters reported earlier this week that Brookfield emerged as the winner of an auction process, which the five owners of the pipeline have been running over several months, to buy Colonial Pipeline for more than $9 billion including debt.

(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Janane Venkatraman and Mrigank Dhaniwala)

((Gnaneshwar.Rajan@thomsonreuters.com;))