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BP considers spinning off US oil and gas pipeline assets into MLP

  • BP said it is considering spinning off some of its U.S. pipelines into a master limited partnership.
  • The oil major is evaluating an IPO of an MLP that could include crude oil, natural gas and refined petroleum pipelines.

BP announced on Tuesday it is considering spinning off some of its U.S. pipelines into a master limited partnership.

The oil major is evaluating an initial public offering of an MLP that could include crude oil, natural gas and refined petroleum product pipelines in the Midwest and Gulf Coast. The company said it could begin the regulatory process to form BP Midstream Partners by the end of the year.

Master limited partnerships provide energy infrastructure builders with access to cheap capital and pay out steady dividends to their investors. BP would own the general partner of the MLP, as well as its incentive distribution rights and a majority of its limited partner interests, the company said.

BP said forming an MLP is just one of the options it is considering in its bid to create more value for its shareholders and grow its pipeline business.

According to BP's website, it moves products through nearly 3,500 miles of pipeline in the U.S. lower 48 states.