Apollo to Buy $1B Stake in BP’s Trans Adriatic Pipeline

BP agreed to sell its 20% stake in the Trans Adriatic Pipeline AG (TAP) to Apollo-managed funds in a transaction valued at $1 billion.

Apollo will purchase the non-controlling interest from BP subsidiary BP Pipelines TAP Ltd. Upon completion of the deal, BP will remain the controlling shareholder of BP Pipelines TAP.

TAP is a Swiss joint venture owned by BP (20%), SOCAR (20%), Snam (20%), Fluxys (20%) and Enagás (20%).

TAP owns the final 880 km leg of the Southern Gas Corridor pipeline system transporting natural gas from the BP-operated Shah Deniz gas field, situated in the Azerbaijan sector of the Caspian Sea, to European markets, including 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, BP said in a Sept. 16 press release.

The transaction is expected to close in the fourth quarter and will comprise a “material portion of BP’s $2[B] to [$]3B divestment target for the year, following $1.2B in divestment and other proceeds in H1’24,” TPH & Co. said in a Sept. 16 report.

TPH noted that BP did not say what it would use the proceeds for, “though we’d anticipate continued progress on balance sheet initiatives.”

Separately, the Financial Times reported on Sept. 16 that BP plans to put up for sale its U.S. onshore wind business for $2 billion as the major “trims renewables business and sells off underperforming assets.”

William Lin, BP’s executive vice president for gas and low carbon energy, said bringing in Apollo as a new investor for TAP will not diminish BP’s role in the strategic asset for its 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,” Lin said.

 Apollo Partner Skardon Baker said the agreement will provide its investors with long-term exposure to an industry-leading infrastructure asset with a stable cash flow profile, while allowing BP to retain control and execute on its capital efficiency strategy.

Leslie Mapondera, a partner at Apollo, said the “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,” Mapondera said.