British energy company BP said on March 21 it has reached agreements for Apollo-managed funds to purchase a 25 percent non-controlling stake in BP Pipelines (TANAP) Ltd – BP TANAP – the BP subsidiary that holds BP’s 12 percent interest in TANAP, owner and operator of the pipeline that carries natural gas from the bp-operated Shah Deniz field in Azerbaijan across Turkey and is the central section of the South Gas Corridor (SGC) pipeline system.
Under the agreement, Apollo funds will purchase the non-controlling shareholding in BP TANAP for a consideration of approximately $1.0 billion, BP said in a press release, adding that proceeds arising from this transaction will contribute towards BP’s program for $20 billion in divestment and other proceeds.
“While the deal enables BP to monetize its interest in TANAP, BP will remain the controlling shareholder of BP TANAP and retain a long-term commercial and strategic interest, including governance rights, in the pipeline – a vital part of the gas value chain for the BP-operated Shah Deniz gas field in Azerbaijan,” BP said.
The transaction is anticipated to close in the second quarter of this calendar year, subject to regulatory and TANAP shareholders approvals.
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“We are pleased to extend our partnership with Apollo and to deepen our partnership in this key piece of energy infrastructure for Europe,” William Lin, BP Executive Vice President, Gas & Low Carbon Energy said. “This unlocks capital from our global portfolio while retaining our role in this strategic asset for bringing Azerbaijan gas to Europe. BP and Apollo will continue to explore further strategic cooperation and mutually beneficial opportunities,” he added.
Leslie Mapondera, a partner at global alternative asset manager Apollo, hailed the deal, saying, “We value the opportunity for our funds to further partner with BP on this critical European infrastructure asset. This investment underscores the relevance of Apollo’s capital for high quality scaled infrastructure opportunities in Europe.”
Skardon Baker, Apollo Partner, said: “We see significant potential with our scaled, long-term capital to partner with BP, in alignment with their strategic objectives. We are pleased by the highly successful partnership to date.”
Shah Deniz has been a critical supplier to Europe and Turkey
The Trans-Anatolian Natural Gas Pipeline or TANAP, running for approximately 1,800 kilometers across Turkey, is the central section of the South Gas Corridor pipeline system. The SGC transports gas from the BP-operated Shah Deniz gas field in the Azerbaijan sector of the Caspian Sea to markets in Europe, including Italy and Greece.
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The Shah Deniz field, one of the world’s largest gas-condensate fields, has an estimated 1 trillion cubic meters of gas reserves. The initial capacity of TANAP is 16 billion cubic meters of gas per year, with the possibility of expanding to 31 billion cubic meters per year in the future. Around six billion cubic meters of gas are delivered to Turkey, while the rest of the volume is supplied to Europe. The 11th Ministerial Meeting of the SGC Advisory Council and the 3rd Ministerial Meeting of the Green Energy Advisory Council will reportedly be held in Baku on April 4.
In November 2024, Apollo and BP completed their previous $1-billion agreement for the U.S.-based asset management company to fund BP’s stake in the 880-kilometre Trans Adriatic natural gas pipeline (TAP). Apollo became a non-controlling shareholder in BP’s unit that holds a 20 percent stake in Trans Adriatic Pipeline AG. Other shareholders, with a 20 percent stake each, are Azerbaijan’s state energy company SOCAR, Italy’s Snam, Belgium-based Fluxys, and Spain’s Enagas.
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