BP, Apollo reach $1b partnership on Trans Adriatic Pipeline

BP and Apollo on Monday announced a strategic partnership, the two companies said in a joint statement. Under the partnership, Apollo-managed funds will purchase a non-controlling stake in BP Pipelines TAP Limited, the BP subsidiary that holds a 20 per cent share in Trans Adriatic Pipeline AG (TAP). The transaction is valued at approximately $1 billion.

Upon completion, BP will remain the controlling shareholder of BP Pipelines TAP Limited. Trans Adriatic Pipeline AG is the owner and operator of a key infrastructure asset for meeting European energy demand, transporting natural gas from Azerbaijan to markets in Greece and Italy.

The proceeds from the transaction will contribute to BP’s 2024 divestment and other proceeds target of $2-3 billion. The transaction is expected to close in the fourth Quarter, pending customary regulatory and partner approvals.

BP and Apollo said they would also explore additional investment opportunities, including potential cooperation in gas and low-carbon energy assets.

“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.” said William Lin, BP’s EVP gas and low carbon energy.

Meanwhile, Skardon Baker, Apollo Partner, said the agreement “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.”

Attribution: BP and Apollo