The British energy giant BP (BP.L) and Apollo Global Management (APO.N) announced on Monday that Apollo Global Management has signed a $1 billion transaction, opening up new funds to support its interest in the Trans Adriatic natural gas pipeline.
The asset management corporation based in the United States will acquire a 20% stake in Trans Adriatic Pipeline AG through BP’s affiliate, making it a non-controlling shareholder.
The remaining shareholders, each holding a 20% stake, are SOCAR, the state energy business of Azerbaijan; Snam (SRG.MI), based in Italy; Fluxys (FLUX.BR), based in Belgium; and Enagas (ENAG.MC), based in Spain.The Trans Adriatic Pipeline (TAP) is a natural gas transportation system that runs from Southern Italy to the Greek border with Turkey.
The Trans Adriatic Pipeline AG is the last 880 kilometers of the 3,500-kilometer Southern Gas Corridor pipeline system, which runs from the Caspian Sea to Europe. It carries natural gas to European markets including Greece and Italy from the BP-operated Shah Deniz gas field in the Azerbaijani portion of the Caspian Sea.The deal’s proceeds would go toward BP’s $2–3 billion 2024 divestment and other proceeds target, which is a component of the business’s disciplined financial framework.
“We are happy to collaborate with BP on a deal that will enable BP to fulfill its goals of maintaining control and carrying out its capital efficiency plan, while giving our investors long-term exposure to a leading infrastructure asset with a steady cash flow profile,” stated Apollo Partner Leslie Mapondera.By 0830 GMT, BP’s shares had increased 0.5% to 406.10p.
After the transaction closes, which is anticipated to happen in the fourth quarter, BP will continue to have a majority stake in the company.
According to a statement from the firms, BP and Apollo will also aim to collaborate on other investment options, such as possible collaboration in infrastructure and low-carbon and gas assets.
