BP releases details about upcoming IPO

Per a filing with the US Securities and Exchange Commission, BP Midstream Partners intends to sell 42.5 million units. The sale, which excludes underwriters' option, is anticipated in the price band of US$19 - 21 each. 

BP Midstream Partners, a master limited partnership (MLP) formed by BP's US pipeline unit, plans to list on the New York Stock Exchange under the symbol ‘BPMP’.

An MLP is a tax-advantaged structure often used by pipelines and other capital intensive companies to distribute excess cash to investors in the form of tax-deferred dividends. Most MLPs rely on external debt to fund new projects.

BP Midstream Partners' formation as a separate vehicle that owns, operates, develops and acquires pipelines and other midstream assets will help in the growth of midstream business. The IPO will be in line with BP's strategy to develop its business and at the same time boost shareholder value. BP Midstream Partners, headquartered in Houston, TX, will have offices in Chicago, IL. 

The IPO revives a plan BP first broached internally about five years ago before slumping crude oil prices forced the oil giant to put the idea on hold. Citigroup, Goldman Sachs and Morgan Stanley are among the underwriters for BP Midstream Partners' IPO.

BP formed the MLP to support the energy giant’s strategy to grow its midstream business by owning, operating, developing and acquiring pipelines and other midstream assets. The MLP’s initial assets are expected to consist of ownership interests in one onshore crude oil pipeline system, one onshore refined products pipeline system and one onshore diluent pipeline system, plus interests in four offshore crude oil pipeline systems and one offshore natural gas pipeline system.