BP rakes in $1 billion from sale of partial stake in pipeline carrying gas from field off Azerbaijan

UK-headquartered energy giant BP has struck a deal with Apollo-managed funds to divest a minor non-controlling stake in BP Pipelines (TANAP), the firm’s subsidiary that holds its interest in Trans-Anatolian natural gas pipeline (TANAP), owner and operator of the pipeline that carries natural gas from a giant offshore field in Azerbaijan across Türkiye.

Thanks to the agreement, Apollo Funds will invest around $1 billion for a 25% non-controlling shareholding in BP Pipelines (TANAP), which holds BP’s 12% interest in TANAP, part of the Southern Gas Corridor (SGC) pipeline system. This deal follows the previous one the duo reached in November 2024 on the Trans Adriatic Pipeline (TAP), the final section of the SGC.

William Lin, BP’s Executive Vice President of Gas & Low Carbon Energy, commented: “We are pleased to extend our partnership with Apollo and to deepen our partnership in this key piece of energy infrastructure for Europe. 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.”

The acquisition deepens Apollo’s exposure to the energy asset while enabling BP to realize value, unlock capital from the infrastructure, and retain strategic governance rights in the pipeline joint venture, seen as a vital part of the gas value chain for the firm’s gas asset in Azerbaijan.

Skardon Baker, Apollo Partner, noted: “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.”

This transaction is anticipated to close in 2Q 2025, subject to regulatory and TANAP shareholders’ approvals. The proceeds arising from the sale will contribute towards the UK-based oil major’s program for $20 billion in divestment and other proceeds. 

Leslie Mapondera, Apollo Partner, said: “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.”

Running for approximately 1,800 kilometers across Türkiye, TANAP is the central section of the SGC pipeline system, which 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.

After a temporary suspension on January 10, 2025, BP resumed operations at its Shah Deniz Alfa (SDA) platform a few days later, after sorting out a technical issue that was found at a subsea pipeline used to handle the transport of gas condensate between the platform and the Sangachal terminal.

The Shah Deniz project is developed in two phases, with Shah Deniz Phase 1 (SD1) covering the drilling of 11 wells, the construction of platforms, Sangachal terminal, and the 692-kilometer South Caucasus Pipeline (SCP) to Türkiye. The commissioning of the Baku-Tbilisi-Erzurum pipeline occurred in 2007, enabling Azerbaijan to start gas exports to Georgia and Türkiye.

The next stage, or Shah Deniz Phase 2 (SD2), is seen as one of the largest and most complex gas projects. BP started production from its latest 48-slot production, drilling, and quarters platform in the Caspian Sea in April 2024.