BP contemplates US oil and gas pipeline assets spin-off

BP contemplates US oil and gas pipeline assets spin-off

BP (LSE:BP) is considering a spin-off of its vast US Gulf and Midwest oil and gas pipeline assets in an initial public offering (IPO).

The plan was first deliberated internally by the UK energy giant five years ago when the potential spin-off was christened BP Midstream Partners, however the oil prices crash of 2014 halted the idea.

The potential IPO would structure the assets as a master-limited partnership (MLP), a common structure followed by pipeline firms.

BP and its underwriters have retained advisors to explore the sale and would register the subsidiary entity by year-end if it decides to go forward with the plans.

In recent years, several energy companies have spun off their pipeline assets to generate capital, including Royal Dutch Shell who raised nearly US$1 billion through an IPO of its midstream assets in 2014.

Last year, BP approached Enbridge regarding the possibility of selling its offshore Gulf of Mexico pipeline network, but the deal fell through.

@RGNonline