Shell Midstream Partners' shares rise 45 pct in debut

* Shell Midstream's IPO raises about $920 million

* Shares (Berlin: DI6.BE - news) open at $32 and touch a high of $33.30

* 40 million common units sold at $23 per share (Adds analyst's comment, details, updates shares)

By Amrutha Gayathri

Oct 29 (Reuters) - Shares of Shell Midstream Partners LP , a master limited partnership formed by Royal Dutch Shell Plc, rose as much as 45 percent in their market debut, in the latest MLP (Xetra: 656990 - news) offering to win investor confidence.

Royal Dutch Shell (Xetra: R6C1.DE - news) is the first of the industry majors to take an MLP public as a means of monetizing assets while lowering the cost of capital.

MLPs are corporate structures that pay no taxes at the federal level and pay out most of their cash flows as dividends to investors.

Under the MLP format, the Anglo-Dutch oil company retains control of 71 percent of the company.

Shares of Shell Midstream opened at $32 and touched a high of $33.30, valuing the company at about $2.25 billion, based on its 67.5 million outstanding common units.

"Investors have warmed up to MLPs because, I think, they increasingly believe that interest rates won't head higher soon," Jack Ablin, chief investment officer of BMO Private Bank in Chicago told Reuters.

Higher returns from MLPs have found favor with investors in a low bond yield environment.

Shell Midstream's IPO follows successful listings by other MLPs, such as PBF Logistics LP (NYSE: PBFX - news) and GasLog Partners LP (NYSE: GLOP - news) in May.

PBF (Taiwan OTC: 1760.TWO - news) 's shares were up about 8 percent above their IPO price of $23, while GasLog (NYSE: GLOG - news) shares were 26 percent above their IPO price of $21.

Shell Midstream's listing comes as a fall in energy prices hastens the decline of big oil, with Western majors selling off assets, cutting investments, returning money to shareholders and shrinking in size.

Seven oil majors, including Shell (LSE: RDSB.L - news) , BP Plc, Exxon Mobil Corp and Chevron Corp, ran a collective deficit of $55 billion last year, according to Morgan Stanley (Xetra: 885836 - news) analysts.

Shell's U.S.-listed shares were up nearly 1 percent at $72.11 in morning trading.

The company's IPO raised about $920 million after the size of the offering was increased and priced above the expected range.

About 40 million common units were sold at $23 per share, above the expected price range of $19-$21.

Houston, Texas-based Shell Midstream owns minority interests in two crude oil pipeline systems along the Texas and Louisiana Gulf Coast and offshore Louisiana.

It also owns minority interests in two refined products pipeline systems that connect the Gulf Coast and southeastern U.S. refineries to major demand centers from Alabama to New York.

Shell Midstream said it planned to use proceeds from the offering to buy stakes in Royal Dutch Shell's other pipelines.

Barclays (LSE: BARC.L - news) and Citigroup (NYSE: C - news) were the lead underwriters for the IPO, the company said in a filing with the U.S Securities and Exchange Commission. (http://bit.ly/1iG7z6c) (Reporting by Amrutha Gayathri in Bangalore; Editing by Savio D'Souza and Simon Jennings)