In one of the world’s largest energy infrastructure deals, Saudi Aramco
is set to raise $12.4bn by leasing usage rights of its stabilized crude oil pipeline network to a consortium led by EIG Global Energy Partners (EIG)
which is one of the world’s leading energy infrastructure investors. According to the deal, the pipeline business will be leased for a period of 25 year through a newly formed entity, Aramco Oil Pipelines Company
and will help the oil major to optimize its portfolio optimization program. Aramco will hold a 51% stake in the new company while retaining full ownership and operational control of its stabilized crude oil pipeline network and EIG will hold 49%. According to the oil company,
“The transaction represents a continuation of Aramco’s strategy to unlock the potential of its asset base and maximize value for its shareholders. It also reinforces Aramco’s role as a catalyst for attracting significant foreign investment into the Kingdom.” Aramco had hired JPMorgan and MUFG
to advise on “Project Seek” in October 2020 with an aim to sell a stake in its pipeline business in line with Abu Dhabi National Oil Company’s (ADNOC)
sale of its natural gas pipeline to a group led by Brookfield
in which it had raised ~$10bn. EIG beat BlackRock
and Brookfield to secure the deal. Mubadala
, Abu Dhabi’s sovereign wealth fund is also in talks with EIG to join the investor group.
Aramco’s bonds were flat on the secondary market. Its 3.25% 2050s
were down 0.1 to trade at 92.625 while its 3.5% 2070s
were up 0.04 to trade at 91.625 cents on the dollar.
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