BP Proposes IPO for U.S. Pipeline Master Limited Partnership

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Researched by Industrial Info Resources (Sugar Land, Texas)--BP plc (NYSE:BP) (London, England) has filed for an initial public offering (IPO) to fund a master limited partnership for its U.S. pipeline assets. Industrial Info is tracking 40 active BP projects in the U.S. worth $11.2 billion.

"The announcement comes after BP said in July it had begun evaluating the formation and IPO of a master limited partnership (MLP) to enhance shareholder value and to support BP's strategy to grow its midstream business," BP said in a press statement. "BP Midstream Partners was formed as a vehicle to own, operate, develop and acquire pipelines and other midstream assets. It will be headquartered in Houston, Texas, with offices in Chicago, Illinois, and will trade on the New York Stock Exchange under the ticker symbol "BPMP," the global energy giant said. For related information, see August 23, 2017, article - BHP Ups Capital Spending to $6.9 Billion, Drops U.S. Shale, Delays Canadian Potash Project.

BP Midstream Partners' initial assets will include ownership interests in one onshore crude oil pipeline system, one onshore refined products pipeline system, and one onshore diluent pipeline system, which carry shipments to or from BP's Whiting Refinery in Indiana, together with interests in four offshore crude oil pipeline systems and one offshore natural gas pipeline system that connect offshore production in the Gulf of Mexico with Gulf Coast refining and distribution hubs. If the IPO is completed, BP would own the general partner of BP Midstream Partners, all of its incentive distribution rights and a majority of its limited partner interests. BP Midstream Partners expects the IPO to occur in the fourth quarter this year.

The onshore crude oil pipeline, BP2, indirectly links Canadian crude oil production with BP's Whiting Refinery, the largest refinery in the Midwest, the company said in a Securities and Exchange Commission filing. BP's River Rouge refined products pipeline system connects the Whiting Refinery to the Detroit refined products market, and the Diamondback diluent pipeline indirectly connects the Whiting Refinery and other diluent supply sources to a third-party pipeline for ultimate delivery to the Canadian oil sands production areas.

BP's Whiting Refinery can process up to 430,000 barrels per day (BBL/d). In 2013, the company finished a large modernization project that allows it to process more grades of oil, including heavy grades from Canada. Industrial Info is tracking $380 million in current project activity at the refinery, including an 85,000-BBL/d naphtha hydrotreater addition that is expected to be completed in early 2019. For more information, see Industrial Info's project report.

The offshore crude oil pipeline systems, which include operations in the Mars production field, link offshore production areas in the Gulf of Mexico with coastal refining and distribution hubs. The offshore natural gas pipeline system, Cleopatra, links offshore production areas in the Gulf of Mexico to an offshore pipeline for ultimate delivery to shore.

Industrial Info is tracking BP's $50 million South Pass 89 Tension Leg Platform addition in the Gulf of Mexico. To handle additional volumes of crude oil (up to 100,000 BBL/d) and natural gas, from the Appomattox offshore platform, BP will install a new tension leg platform next to the existing SP-89-E platform. Construction kicked off in third-quarter 2016, with completion expected in early 2018. For more information, see Industrial Info's project report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.