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    BP unloads stake in US pipeline unit: press

Summary

The UK supermajor is making headway on debt reduction.

by: Daniel Graeber

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Complimentary, NGW News Alert, Natural Gas & LNG News, Corporate, Mergers & Acquisitions, Financials, Infrastructure, Pipelines, News By Country, United States

BP unloads stake in US pipeline unit: press

Investment firm Sixth Street paid $700mn to take a minority stake in the US division of BP’s pipeline business, Bloomberg news reported April 12.

Citing a person familiar with the deal commenting on condition of anonymity, Bloomberg reported that the 49% stake for Sixth Street forms the basis of a future midstream joint venture. With its headquarters in Chicago, BP’s pipeline division owns and operates just under 7,000 km of oil and gas infrastructure, including connections to BP’s refinery in Whiting, Indiana.

Neither company offered comments on the reported sale.

The midstream divestment follows an April 6 announcement from BP that it believed it reached its $35bn net debt target in the first quarter. BP is due to publish its results for the three-month period on April 27. But CEO Bernard Looney, who set debt reduction as a cornerstone of the company's strategy last year, said he estimated the target had been met thanks to disposal proceeds and "strong" trading performance.

Having delivered on its net debt goal, the UK major's plan is to return at least 60% of surplus cash flow to shareholders through share buybacks. It will provide an update on its buyback scheme when it publishes its first-quarter results.

BP swung to a net loss of $5.7bn on weaker oil and gas prices in 2020, after earning $10bn in profits in the previous year.