Pipelines

BP considering spin-off of pipeline assets in the United States

BP considering spin-off of pipeline assets in the United States
Photo courtesy of BP.

BP announced that it is evaluating spinning off its pipeline assets in the United States through an initial public offering (IPO) of a master limited partnership (MLP).

The midstream assets that are being considered for initial contribution to the MLP are crude oil, natural gas and refined product pipelines located in the Midwest and on the U.S. Gulf Coast.

If BP ultimately decides to pursue the IPO, an indirect, wholly owned subsidiary, BP Midstream Partners L.P., would file a Registration Statement with the U.S. Securities and Exchange Commission to initiate the regulatory process in the second half of this year.

If an IPO is completed, BP would own the general partner of the MLP, all of its incentive distribution rights and a majority of its limited partner interests.

BP expects this move to result in increased efficiency for the master limited partnership and provide it with capital in favorable terms.

BP did not provide further details on the potential transaction.

BP operates in 48 states in the United States and has almost 3,500 miles of pipeline. BP’s terminal facilities can transport and store more than 1.3 million barrels of oil equivalents per day (BOE/d), which include crude oil, refined petroleum products and natural gas.

The plan was originally proposed five years ago, but was placed on hold due to the continued weakness in crude oil prices.

If the plan goes through this time, the transaction would be one of the largest initial public offering in 2017.

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