Saudi Arabian Oil Company (Aramco) has signed a $15.5-billion lease and leaseback deal involving its gas pipeline network with a consortium led by BlackRock Real Assets and Hassana Investment Company, the investment management arm of the General Organization for Social Insurance (GOSI) in Saudi Arabia, in one of the world’s largest energy infrastructure deals.
This represents significant progress in Aramco’s asset optimisation programme and is the second such infrastructure transaction by Aramco in 2021 after the closing of the oil pipeline infrastructure deal in June.
Upon completion of the gas pipeline transaction, Aramco will receive upfront proceeds of $15.5 billion, further strengthening its balance sheet. The deal unlocks additional value from Aramco’s diverse asset base and has attracted interest from a wide range of worldwide investors.
As part of the transaction, a newly-formed subsidiary, Aramco Gas Pipelines Company, will lease usage rights in Aramco’s gas pipelines network and lease them back to Aramco for a 20-year period.
In return, Aramco Gas Pipelines Company will receive a tariff payable by Aramco for the gas products that will flow through the network. Aramco will hold a 51 per cent majority stake in Aramco Gas Pipeline Company and sell a 49 per cent stake to investors led by BlackRock and Hassana.
Aramco will continue to retain full ownership and operational control of its gas pipeline network and the transaction will not impose any restrictions on Aramco’s production volumes.