Aramco closes $12.4bn infrastructure deal with global investor consortium

An employee looks out over oil transport pipelines at Saudi Aramco’s Ras Tanura oil refinery. An EIG-led consortium closed a $12.4bn Aramco pipelines deal. Bloomberg.

Aramco and an international investor consortium; including EIG and Mubadala, announced the successful closing of the share sale and purchase agreement; in which the consortium has acquired a 49% stake in Aramco Oil Pipelines Company, a subsidiary of Aramco, for $12.4bn.

The consortium consists of a broad cross-section of investors from North America, Asia and the Middle East. This long-term investment by the consortium underscores the compelling investment opportunity presented by Aramco’s globally-significant pipeline assets; the company’s robust long-term outlook and the attractiveness of Saudi Arabia to institutional investors.

As part of the transaction, first announced in April 2021; Aramco Oil Pipelines Company as well as Aramco entered into a 25-year lease and leaseback agreement for Aramco’s stabilized crude oil pipelines network. Aramco Oil Pipelines Company will receive a tariff payable by Aramco for stabilized crude oil flows; backed by minimum volume commitments.

Aramco also continues to hold a 51% majority stake in Aramco Oil Pipelines Company and retains full ownership and operational control of its stabilized crude oil pipeline network. The transaction does not impose any restrictions on Aramco’s actual crude oil production volumes; subject to production decisions made by Saudi Arabia.

Significant milestone

On this occasion, Aramco President & CEO, Eng. Amin H. Nasser, said: “We are pleased to conclude this transaction with the global consortium. The interest we have received from investors also shows strong confidence in our operations and the long-term outlook for our business.

“It is also a significant milestone that reflects the value of our assets; and paves the way forward for our portfolio optimization strategy. We plan to continue to explore opportunities to capitalize on our industry-leading capabilities. Bresides, attract the right type of investment to Saudi Arabia.”

For his part, Abdulaziz M. Al Gudaimi, Aramco senior vice president of corporate development, also said: “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.

“This transaction also 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.”

R. Blair Thomas, EIG’s chairman & CEO, said: “We believe this is the marquee infrastructure transaction globally and we are pleased to see that so many leading international investors agree with us.”