ArcLight buys BP pipeline amid asset selloff

BP filed for an IPO of its midstream unit last week that could raise up to $500m.

Arclight Capital Parthners has acquired a 30 percent stake in a refined oil pipeline from BP a week after the energy company said it would IPO its midstream unit in a move that could net it up to $500 million.

ArcLight, an energy infrastructure manager, agreed to purchase an interest in the Olympic Pipeline that spans 400 miles in Washington and Oregon. BP, through its affiliates BP Pipelines and ARCO Midcon, said it will continue to operate the pipeline. Details of the transaction are undisclosed.

The deal follows an earlier agreement between ArcLight and BP to form a joint venture investing in two large-scale refined product terminals connected to the Olympic Pipeline. ArcLight has granted one of its subsidiaries, TransMontaigne Partners, a right of first offer to purchase the firm’s stake in Olympic Pipeline.

ArcLight closed its previous energy fund on $5.58 billion in 2015.

Last week, BP applied to list BP Midstream Partners under an MLP structure, allowing investors to buy into its US Midwest and Gulf Coast pipeline assets. BP said the IPO plans to raise around $100 million, but analysts at Renaissance Capital estimated the take could be as high as $500 million when it lists on the New York Stock Exchange later this year.

Citigroup, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and JP Morgan are the underwriters for the IPO.
BP owns and operates a 3,500-mile network of pipelines and terminal facilities in the US that transport and store over 1.3 million barrels of oil per day.