Aramco, EIG sign $12.4b pipeline deal
STAKE SALE TO US-LED CONSORTIUM IS THE BIGGEST SINCE SAUDI OIL PRODUCER’S IPO IN 2019
Saudi oil producer Aramco has agreed a $12.4 billion deal to sell a 49 per cent stake in its pipelines to a consortium led by US-based EIG Global Energy Partners.
Announced late on Friday, it is the company’s largest deal since its record $29.4 billion initial public offering in late 2019.
Aramco will retain a 51 per cent stake in the new company Aramco Oil Pipelines.
EIG, which has invested more than $34 billion in energy and energy infrastructure, was the deal’s underwriter and will work with Aramco in the coming days to decide on other parties for the consortium, a source said.
Mubadala is in discussions on being part of it, a spokesman said. Aramco will retain operational control of the pipeline network and assume all operating and capital expense risk, the companies said. The deal will have no impact on Aramco’s oil production. Aramco’s Chief Executive Amin Nasser said “moving forward, we will continue to explore opportunities that underpin our strategy of long-term value creation.”
The two companies did not identify the names of other investors in the consortium.
Other bidders
Other bidders in the deal process included Apollo Global Management and New York-based Global Infrastructure Partners. US asset manager BlackRock and Canada’s Brookfield Asset Management Inc stepped away from bidding, Reuters reported on April 6.
“The transaction represents a continuation of Aramco’s strategy to unlock the potential of its asset base and maximise value for its shareholders,” Aramco said in a statement.
The pipeline deal is similar to infrastructure deals signed over the last two years by Adnoc, which raised billions of dollars through sale-and-leaseback deals of its oil and gas pipeline assets.
Aramco stake is preparing a so-called “staple financing” for its bidders—- a financing package provided by the seller that buyers can use to back their purchase, sources have told Reuters previously.
Aramco said last month it was betting on an Asian-led rebound in energy demand this year after it reported a steep slide in net profit for 2020 on Sunday and scaled back its spending plans.