Aramco and an international investor consortium led by affiliates of BlackRock and Hassana, have closed a lease and leaseback deal previously announced last December which will see them acquire a 49 percent stake in Aramco Gas Pipelines Company, a subsidiary of the state-owned company, for $15.5bn.
As part of the transaction, Aramco Gas Pipelines Company and Aramco entered into a 20-year lease and leaseback arrangement in connection with Aramco’s gas pipeline network under which Aramco Gas Pipelines Company will receive a tariff payable by the company for the specified gas products that flow through the network, backed by minimum commitments on throughput.
Aramco retains a 51 percent majority stake in Aramco Gas Pipeline Company, and full ownership and operational control of the gas pipeline network. The transaction does not impose any restrictions on Aramco’s production volumes.
The announcement follows the closing of a $12.4bn infrastructure transaction in connection with the oil giant’s stabilised crude oil pipeline network in June 2021.
“This agreement is our second landmark infrastructure transaction in less than a year and another major step forward in our long-term value creation strategy. The participation of the consortium led by BlackRock and Hassana underlines the appeal of Aramco’s portfolio to leading global investors as Saudi Arabia’s economic transformation builds momentum, requiring a robust energy infrastructure and network that are vital to meet the needs of an expanding industrial sector,” said president and CEO, Amin bin Hassan Nasser.
“At the same time as Aramco raises gas production and seeks new opportunities in low-carbon energy sources over the next decade, the importance of our energy infrastructure in relation to global energy security and reliability is expected to grow in significance,” he continued.
The consortium comprises institutional investors such as Keppel Infrastructure Trust, Silk Road Fund, and China Merchants Capital.
This long-term investment by the consortium represents further progress in Aramco’s portfolio optimisation programme and highlights the investment opportunities presented by the companie’s infrastructure assets.
Maximising the potential
“We remain focused on maximising the potential of our assets and assessing new investment opportunities to further enhance our robust balance sheet,” said Abdulaziz bin Mohammed Al Gudaimi, Aramco senior vice president of corporate development.
“The gas infrastructure transaction with BlackRock and Hassana is a testament of the relationship with the global investors and emphasises gas as a key pillar to grow in domestic and international markets,” he added.
This comes in as the company has also signed a MoU with BlackRock, to explore joint opportunities in future energy transition projects related to low carbon energy infrastructure.
“We are pleased to close this landmark transaction and deepen our partnership with Aramco by signing a MoU to develop low carbon energy infrastructure together,” said Larry Fink, chairman and CEO of BlackRock.
“Getting to a net zero world will not happen overnight. It requires us to shift the energy mix in incremental steps to achieve a green energy future. Bold, forward-thinking incumbents like Aramco have the technical expertise and capital to play a crucial role in this transformation, and we look forward to our future collaboration,” he continued.
Saad bin Abdulmohsen Al-Fadly, CEO of Hassana Investment Company, added: “We are delighted to achieve closing of this landmark transaction which highlights our focus to invest in critical infrastructures in the Kingdom of Saudi Arabia. We look forward to working with our partners at Aramco and BlackRock to make this a successful long-term investment.”
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