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BP Midstream Partners’ IPO Plans for US Pipelines on Track


A wholly owned indirect subsidiary of oil giant BP plc BP, BP Midstream Partners LP, has commenced its plan of initial public offering (IPO) of common units, which signify limited partner interests.

In this respect, BP Midstream Partners has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission ("SEC"). The news followed after the announcement BP made in July, whereinit appraised the creation and IPO of a master limited partnership (MLP).

Subject to market conditions, BP Midstream Partners anticipates the offering to take place in the fourth quarter of 2017. After being listed on the NYSE, the common units are expected to trade under the ticker symbol “BPMP”.

Benefits of the IPO

BP Midstream Partners’ formation as a separate vehicle that would own, operate, develop and acquire pipelines and other midstream assets will help in the growth of midstream business. The IPO would be in line with BP’s strategy to develop its midstream business and at the same time boost shareholder value. Headquartered in Houston, TX, BP Midstream Partners will have offices in Chicago, IL.

Assets of BP Midstream Partners

Initially, ownership interests in one onshore crude oil pipeline system and one onshore refined products pipeline system are believed to form assets of BP Midstream Partners. Other properties will include an onshore diluents pipeline asset, which delivers liquids to or from the energy giant’s Whiting Refinery in Whiting, IN. The company will also have interests in four offshore crude pipeline systems and one offshore natural gas pipeline system that links offshore production resources, located off the coast of the Gulf of Mexico, with the Gulf Coast refining and distribution hubs.

On completion of the IPO, BP would own the general partner of BP Midstream Partners, its incentive distribution rights and a major portion of its limited partner interest.

Price Movement

The company’s shares have lost 1.3% as against the industry’s gain of 0.7% over the last three months.

Zacks Rank & Key Picks

Currently, BP carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include TransCanada Corporation TRP, Transmontaigne Partners LP TLP and Range Resources Corporation RRC. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Calgary, Canada, TransCanada is a midstream energy firm in North America. The company delivered an average positive earnings surprise of 4.06% over the last four quarters.

Transmontaigne, headquartered in Denver, CO, involves in transporting and storing refined petroleum products. The firm delivered an average positive earnings surprise of 6.60% over the last four quarters.

Based in Fort Worth, TX, Range Resources is an independent oil and gas company, engaged in the exploration, development and acquisition of U.S. oil and gas resources. The company’s 2017 earnings are estimated to grow 1587.17%.

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