BP has agreed to sell a non-controlling stake in BP Pipelines TAP, which holds a 20% stake in Trans Adriatic Pipeline, to funds managed by Apollo (Apollo Funds) for a price of around $1bn.
Following the completion of the deal, BP will continue to be the controlling shareholder of BP Pipelines TAP.
BP said that the proceeds from the transaction will aid the company in achieving its divestment target of $2bn-$3bn for 2024.
BP gas and low carbon energy EVP William Lin said: “We are very pleased to come together with Apollo on this key piece of Europe’s energy infrastructure. Importantly, while bringing in a new investor, this does not diminish BP’s role in a strategic asset for our Azerbaijan gas business.
“We see great potential in building innovative arrangements such as this and look forward to continuing to explore further opportunities with Apollo through growing this collaborative relationship.”
Trans Adriatic Pipeline owns and operates the final 880km section of the 3,500km long Southern Gas Corridor pipeline system that transports natural gas from the Caspian Sea to Europe.
The objective of the Trans Adriatic Pipeline is to transport natural gas from the BP-operated Shah Deniz gas field in the Azerbaijani sector of the Caspian Sea to European markets, including Greece and Italy.
Trans Adriatic Pipeline began commercial operations in late 2020. The pipeline has an initial capacity of 10 billion cubic metres (bcm) per annum with scope to expand to 20bcm per annum in future.
It begins at Kipoi in Greece at the border with Turkey and connects to the Trans Anatolian Pipeline (TANAP). The pipeline system runs for 550km across the entire territory of Northern Greece, 215km onshore in Albania, 105km offshore under the Adriatic Sea and comes ashore in Italy.
Trans Adriatic Pipeline’s shareholding is equally distributed, with BP, SOCAR, Snam, Fluxys, and Enagás each holding a 20% stake.
BP and Apollo also agreed to explore further investment opportunities together, focusing on potential collaboration in gas and low-carbon energy assets, as well as infrastructure.
Apollo partner Skardon Baker said: “We are pleased to partner with bp on an agreement that will provide our investors with long-term exposure to an industry-leading infrastructure asset with a stable cash flow profile, while allowing bp to meet its objectives of retaining control and executing on its capital efficiency strategy.”
The transaction is anticipated to close in Q4 2024, pending the customary regulatory and partner approvals.
