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June 21, 2021updated 26 Oct 2021 10:35am

EIG-led consortium acquires $12.4bn stake in Aramco’s pipelines unit

The international investor consortium comprises renowned investors from North America, Asia and the Middle East.

By Archana Rani

EIG Global Energy Partners-led consortium has acquired a 49% stake in newly formed global energy supplier Aramco Oil Pipelines from Saudi Aramco for about $12.4bn.

The deal attracted a global group of institutional investors from China, Saudi Arabia, Korea, UAE and the US, EIG said.

The consortium includes names such as Mubadala Investment Company, an Abu Dhabi Sovereign Investor, Silk Road Fund, Hassana, and Samsung Asset Management, amongst others.

In a press statement, Saudi Aramco said: “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 the Kingdom of Saudi Arabia to institutional investors.”

Aramco Oil Pipelines is the holding company of Saudi Aramco’s all the existing and future stabilised crude pipelines in Saudi Arabia. These assets connect oilfields to downstream networks.

Aramco president and CEO Amin Nasser said: “It is a significant milestone that reflects the value of our assets and paves the way forward for our portfolio optimisation strategy.

“We plan to continue to explore opportunities to capitalize on our industry-leading capabilities and attract the right type of investment to Saudi Arabia.”

Aramco will continue to own a 51% stake in Aramco Oil Pipelines Company.

As part of the transaction, which was signed in April 2021, Aramco Oil Pipelines Company and Aramco entered into a 25-year lease and leaseback agreement.

It allows the usage rights in Saudi Aramco’s stabilised crude oil pipelines network to be leased to Aramco Oil Pipelines.

The new entity will provide the exclusive right to use, transport through, operations, and maintenance of the pipeline network to Saudi Aramco during a 25-year period.

The right to use the network will be granted in exchange for a payment made by Saudi Aramco based on a quarterly, volume-based tariff.

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