11:13 AM EDT, 09/16/2024 (MT Newswires) -- BP (BP) agreed to sell a non-controlling stake in BP Pipelines TAP to alternative asset manager Apollo Global Management ( APO ) in a transaction valued at $1 billion.

BP Pipelines TAP holds a 20% stake in Trans Adriatic Pipeline, according to a joint statement released Monday. Trans Adriatic Pipeline owns the final 880-kilometer leg of the Southern Gas Corridor pipeline system that transports natural gas from the BP-operated Shah Deniz gas field in the Caspian Sea to European countries such as Greece and Italy.

"While bringing in a new investor, this does not diminish BP's role in a strategic asset for our Azerbaijan gas business," William Lin, BP's executive vice president of gas and low carbon energy, said in a statement. "We see great potential in building innovative arrangements such as this and look forward to continuing to explore further opportunities with Apollo."

The sale will generate capital that British energy giant BP can reallocate to other initiatives that drive near-term value. It also aligns with the company's plans to achieve an estimated $2 billion to $3 billion in divestments and other proceeds this year as part of its "disciplined financial frame."

While BP didn't provide a specific use of the proceeds, Tudor Pickering Holt analyst Jeoffrey Lambujon said in a note that they will likely be directed toward "balance sheet initiatives."

The deal is expected to close in the fourth quarter of 2024, pending regulatory and partner approvals. Upon completion, BP will remain the controlling shareholder of BP Pipelines TAP.

Apollo's investors will achieve "long-term exposure to an industry-leading infrastructure asset with a stable cash flow profile, while allowing BP to meet its objectives of retaining control and executing on its capital efficiency strategy," Apollo Partner Skardon Baker said.

The companies will look to collaborate on other future investment opportunities, including potential co-operation in gas and low carbon energy assets and infrastructure.