Private Equity Takes Over Big Oil's Pipelines: Majors Monetize Assets for Cash (2025)

Imagine a world where the giants of oil and gas are turning to private equity firms for a lifeline, selling off parts of their vast pipeline networks to keep the black gold flowing. This isn't just business as usual; it's a seismic shift in how energy titans are navigating a turbulent market. But here's where it gets controversial: Is this a smart pivot for Big Oil, or a risky gamble that could reshape the industry forever?

In a surprising twist, the world's leading private equity players are diving into the infrastructure holdings of Middle Eastern national oil companies, as Saudi Arabia and the United Arab Emirates welcome foreign investments into their pipeline systems. This momentum is now spilling over, with private equity heavyweights eyeing the assets of global oil majors, offering them a fresh source of capital to pump back into exploration and production. With oil prices hovering around $60 a barrel and public investors still wary—despite the evolving story around environmental, social, and governance (ESG) priorities—private equity could be the game-changer these companies need to unlock funds without diluting their stock. And this is the part most people miss: These deals aren't just about money; they're about survival in an industry under pressure from green transitions and market volatility.

The roots of these infrastructure transactions trace back to the Middle East, but they're poised to branch out to international oil giants desperate for cash to maintain shareholder dividends and share buybacks, all while ramping up their oil and gas output. Picture this: As oil prices stay subdued, these majors are exploring ways to sell off portions of their pipelines and storage facilities, freeing up capital for their core operations.

Investors Eye Big Oil’s Infrastructure Assets

Recently, savvy investors have been pushing top brass at ExxonMobil, BP, TotalEnergies, and Eni to entertain offers from private equity groups for stakes in their pipeline and storage networks. This represents a novel strategy for these behemoths to generate revenue from their infrastructure without relying on the stock market. Ahead of ADIPEC—an annual Abu Dhabi International Petroleum Exhibition and Conference, one of the energy sector's premier events—private equity representatives huddled in a confidential session with executives from these companies, urging them to rethink their approach to assets, according to a Financial Times report. 'You need to change your perspective on capital,' one attendee reportedly said, highlighting how private equity is eager to invest where public markets remain lukewarm toward oil and gas.

To put it simply for beginners, private equity firms are like specialized investors who buy and manage assets, often with a focus on long-term growth, unlike public markets that can be swayed by short-term trends. 'Grab the affordable funding and pour it back into your main business,' the source added, pointing to opportunities with the infrastructure divisions of major investment houses.

And the deals are already happening. For instance, funds managed by Apollo struck a $1 billion agreement with BP in March to acquire a 25% non-controlling share in BP Pipelines (TANAP) Ltd., the entity that owns BP's 12% slice of the TANAP pipeline. This pipeline transports natural gas from Azerbaijan through Turkey, and the deal lets BP cash in while keeping control and a strategic role, including governance rights, in this crucial link for BP's Shah Deniz gas field. Before that, Apollo partnered with BP again for a roughly $1 billion investment in a non-controlling stake in BP Pipelines TAP Limited, securing a 20% interest in the Trans Adriatic Pipeline AG (TAP). BP noted in March 2025 that they're open to more collaborations in infrastructure and even low-carbon energy, aligning with their renewed emphasis on oil and gas.

This summer, Shell finalized the transfer of its 16.125% stake in the entity behind the Colonial Pipeline in the U.S. to Colossus AcquireCo LLC, a Brookfield Infrastructure Partners subsidiary. Other supermajors are watching closely, as the Middle East's state oil firms pioneered this wave.

Investors Flock to Middle East Energy Infrastructure

Back in 2020, Abu Dhabi's ADNOC sealed a massive $20.7 billion pact with Global Infrastructure Partners (GIP), Brookfield, and others to sell a 49% share in ADNOC Gas Pipeline Assets LLC. This year, KKR secured a minority position in the same entity. Interestingly, KKR was involved in the groundbreaking 2019 deal for a minority stake in ADNOC's oil pipelines, a first for foreign managers investing in Gulf state energy infrastructure, alongside BlackRock. Fast forward to last year, and KKR and BlackRock offloaded their 40% stake in ADNOC Oil Pipelines to Abu Dhabi-based Lunate.

Saudi Arabia is jumping on board too, with Aramco aiming to monetize its assets through partnerships with international funds. Earlier this year, Aramco inked an $11 billion lease-and-leaseback arrangement for its Jafurah gas processing plants with a group led by GIP (part of BlackRock). Jafurah is Saudi Arabia's biggest non-associated gas project, vital for Aramco's goal to boost gas output by 60% from 2021 to 2030 amid growing domestic needs. To explain for newcomers, lease-and-leaseback means Aramco effectively sells the asset but leases it back, generating cash flow without losing operational control.

The Middle East has seen a flurry of such agreements lately. Bahrain's Bapco Energies handed a minority share in the Saudi Bahrain Pipeline Company (SBPC) to a BlackRock fund. Meanwhile, Kuwait's Kuwait Petroleum Corporation (KPC) is eyeing up to $7 billion by leasing segments of its pipeline system, mirroring Aramco's approach, as per Bloomberg.

This trend, sparked in the Middle East, is now reaching Big Oil, evident in Shell and BP's recent transactions. Private equity injections create a mutually beneficial scenario: Majors access capital beyond their dwindling public markets, while funds enjoy steady, long-term yields. But here's where it gets controversial—do these deals prioritize profit over environmental concerns in an era of climate activism? And this is the part most people miss: Could this shift accelerate fossil fuel investments, delaying the global energy transition?

By Tsvetana Paraskova for Oilprice.com