USD 1bn Deal: bp Sells Stake in TAP to Apollo

bp and Apollo signed an agreement for Apollo-managed funds to purchase a non-controlling stake in bp Pipelines TAP Limited, the bp subsidiary that holds a 20% share in Trans Adriatic Pipeline AG (TAP) in a transaction valued at approximately USD 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 – the final 880-kilometre leg of the Southern Gas Corridor pipeline system that transports natural gas from the bp-operated Shah Deniz gas field in the Azerbaijan sector of the Caspian Sea to markets in Europe such as Greece and Italy.

bp and Apollo will also look to partner on additional investment opportunities, including potential co-operation in both gas and low carbon energy assets, and infrastructure.

“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,” William Lin, bp EVP gas and low carbon energy, stated.

“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,” Skardon Baker, Apollo Partner, added.

“This innovative transaction structure is indicative of the types of bespoke solutions we can provide at Apollo, and we believe we are ideally positioned to execute on additional strategic transactions with bp. Together, we see more potential opportunities, as we look to leverage Apollo’s long-term capital and sustainability & infrastructure investment expertise to partner with bp on its strategic plans, including energy transition opportunities,” Leslie Mapondera, Apollo Partner, noted.

The proceeds from the transaction will contribute to bp’s 2024 divestment and other proceeds target of USD 2-3 billion, part of the company’s disciplined financial frame. The transaction is expected to close in 4Q 2024, subject to customary regulatory and partner approvals required.