British energy major BP has entered into an agreement with Apollo-managed funds for the sale of a non-controlling interest in its subsidiary, bp Pipelines TAP, valued at approximately $1bn (£757.48m).
This subsidiary holds a 20% stake in the Trans Adriatic Pipeline AG (TAP), which owns and operates a crucial piece of infrastructure that addresses European energy needs.
This includes the final 880km section of the Southern Gas Corridor pipeline system.
This pipeline carries natural gas from the Shah Deniz gas field in Azerbaijan’s Caspian Sea sector, operated by bp, to various European markets including Greece and Italy.
The deal is expected to close in the fourth quarter of 2024, subject to regulatory and partner approvals.
BP will retain the controlling interest in bp Pipelines TAP post-transaction, ensuring continued oversight of its strategic asset.
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By GlobalDataOther shareholders, each holding a 20% stake, include Azerbaijan’s state energy company SOCAR, Italy’s Snam, Belgium-based Fluxys and Spain’s Enagas.
The collaboration between bp and Apollo extends beyond this transaction, with plans to explore additional investment opportunities.
These may include joint ventures in gas and low carbon energy assets, as well as other infrastructure projects.
The proceeds from this transaction will contribute to bp’s divestment target of $2bn–3bn by 2024.
This is part of bp’s broader financial strategy, which emphasises disciplined investments and portfolio management.
bp EVP of gas and low carbon energy 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.”
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.”
BP recently solidified its relationship with Palantir Technologies, signing a five-year agreement.
This partnership will enhance bp’s AI capabilities through Palantir’s AIP software.
