Aramco closes $12.4 billion pipeline business stake sale

Aramco has completed the sale of a 49 per cent stake in the newly formed Aramco Oil Pipelines for $12.4 billion to an international investor consortium led by the U.S.-headquartered EIG.

Aramco continues to hold a 51 per cent majority stake in the subsidiary and retains full ownership and operational control of its stabilized crude oil pipeline network.

As part of the transaction, first announced in April, Aramco Oil Pipelines and Aramco entered into a 25-year lease and leaseback agreement for Aramco’s stabilized crude oil pipelines network.

The newly formed entity will receive a tariff payable by Aramco for stabilized crude oil flows, backed by minimum volume commitments.

The pipeline network, which includes all of Aramco’s existing and future stabilized crude pipelines in Saudi Arabia, connects oilfields to downstream networks and transports crude oil produced in the Kingdom under its concession agreement.

“The interest we received for this deal is evidence of continued confidence in our Company from institutional investors and sets a new benchmark for infrastructure transactions globally,” said Abdulaziz M. Al Gudaimi, senior vice president of corporate development at Aramco.

“This transaction utilizes our world-class pipeline infrastructure to create additional value for our shareholders, reinforcing our Company’s resilience and ability to adapt in a rapidly changing business environment.”

The EIG-led co-investment process in Aramco Oil Pipelines gathers a global group of institutional investors from China, Saudi Arabia, Korea, the United Arab Emirates and the U.S., including, amongst others, Mubadala Investment, Silk Road Fund, Hassana and Samsung Asset Management.

Aramco is the operator of the Marjan field which is one of the largest oil and gas fields in the Arabian Gulf.

The Saudi giant recently awarded Lamprell with an engineering, procurement, construction and installation (EPCI) contract as part of their long-term agreement programme (LTA).