BP files for IPO of pipeline assets

British energy company BP has filed for an initial public offering of its US Midwest and Gulf Coast pipeline assets.

BP Midstream Partners LP, the master limited partnership (MLP) formed by BP's US pipeline unit, plans to list on the New York Stock Exchange under the symbol ‘BPMP’, it said in a filing with the US Securities and Exchange Commission.

The filing comes after the UK-based group said in July that it was considering such a spin-off.

BP Midstream Partners will be organised as a so-called master limited partnership, or MLP. MLPs are frequently used in the energy sector, and are designed to distribute their excess cashflow to investors in a way that provides tax benefits.

A BP subsidiary will become the general partner that controls almost all aspects of the MLP’s operations, while investor will be able to buy limited units. BP said in the filing that it expects to generate “stable, fee-based cashflows” with “limited direct exposure to commodity price fluctuation.”

BP Midstream Partners’s initial assets will consist of infrastructure serving crude oil, natural gas, refining products and dilutes for BP and other third parties. The BP MLP would join a similar spin-off by fellow oil major Royal Dutch Shell, called Shell Midstream Partners.

BP Midstream Partners, a wholly owned, indirect subsidiary of the London-based energy giant, will be headquartered in Houston and have offices in Chicago.

The IPO is expected to occur in 4Q17, depending on market conditions.

The number of shares and expected price range for the IPO have not been announced yet. However, BP is expected to own a majority of the MLP’s limited partner interests, in addition to the general partner of BP Midstream Partners and all of its incentive distribution rights.