Aramco signs $15.5 billion contract with a global consortium led by BlackRock to build a gas pipeline.
Aramco signs $15.5 billion contract with a global consortium led by BlackRock to build a gas pipeline.
Saudi Aramco signed a $15.5 billion lease and leaseback deal
DHAHRAN — In one of the world’s largest energy infrastructure deals, Saudi Aramco 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 Saudi Arabia’s General Organization for Social Insurance (GOSI).
This marks a big step forward in Aramco’s asset optimization effort, and it is the company’s second infrastructure transaction this year, after the completion of an oil pipeline infrastructure acquisition in June 2021.
Aramco would earn $15.5 billion in upfront cash when the gas pipeline agreement is completed, substantially bolstering its balance sheet. The acquisition adds value to Aramco’s varied asset base and has piqued the interest of a wide spectrum of international investors, demonstrating the attractiveness of the investment opportunity. Trending Now: To enhance the client experience, stc pay has formed a relationship with Moven.
Aramco Gas Pipelines Company, a newly established company, will lease use rights in Aramco’s gas pipeline network and lease them back to Aramco for a 20-year period as part of the deal. In exchange, Aramco Gas Pipelines Company will be paid a fee for the gas products that will flow via the network, as well as minimum throughput guarantees.
Aramco will own 51 percent of Aramco Gas Pipeline Company and sell the remaining 49 percent to a group of investors led by BlackRock and Hassana. Aramco will keep full ownership and operational control of its gas pipeline network, and the sale will have no impact on the company’s production quantities.
Aramco is totally devoted to environmentally friendly methods and is a pioneer in the industry when it comes to decreasing greenhouse gas emissions, which are among the lowest in the industry. “Today, we have attained yet another key milestone in our portfolio rationalization effort as we develop towards a bigger and stronger gas business,” stated Aramco President and CEO Amin H. Nasser.
It illustrates our unique value proposition and capacity to attract prominent global investors to Saudi Arabia, while bringing in BlackRock and Hassana as partners indicates our commitment to long-term wealth development for our shareholders. Our partners will gain from a contract related to a world-class gas infrastructure asset, since gas is projected to play a vital role in the worldwide transition to a more sustainable energy future.”
The news comes after Aramco’s stabilized crude oil pipeline network was leased and leased back for $12.4 billion in June to a consortium led by EIG Global Energy Partners. Read More: Saudi Arabia has approved the vaccinations Sinopharm Sinovac and Covaxin Sputnik for Hajj and Umrah pilgrimages.
“Our gas pipeline assets are vital and increasing, and closely integrated with the rest of Aramco’s oil and gas facilities,” said Abdulaziz M. Al Gudaimi, Aramco Senior Vice President of Corporate Development. We are glad to announce that the second transaction has been completed, and we are looking for long-term partners that understand and respect the sector. This is the region’s largest energy infrastructure acquisition to date, demonstrating Aramco’s unique standing as a partner for leading global institutional investors.”
“BlackRock is happy to partner with Saudi Aramco and Hassana on this important transaction for Saudi Arabia’s infrastructure,” said Larry Fink, Chairman and CEO of BlackRock. Aramco and Saudi Arabia are taking significant, forward-thinking initiatives to move the Saudi economy toward renewable energy, clean hydrogen, and a net-zero future. Natural gas infrastructure that is responsibly managed has a significant role to play in this transition.” Read More: For UAE citizens travelling to eight places, including India, the United Kingdom, the United States, Pakistan, and the Philippines, Covid travel requirements apply.
“Hassana is happy to be a part of this major deal and the related world-class assets,” said Saad Al-Fadly, CEO of Hassana Investment Company. We’re particularly happy about this acquisition since it aligns with Hassana’s objective of building long-term value for GOSI and bolstering our long-term alliances with strong and respected businesses like Aramco and BlackRock.”
“We look forward to cooperating with Aramco and heading the equity consortium in this acquisition including Aramco’s gas pipeline network,” said Mark Florian, Managing Director, BlackRock Real Assets. The highly contractual nature of this investment is a key component of our investing strategy, and it provides an appealing prospect for our clients seeking infrastructure portfolio diversity.”
The gas pipeline deal is planned to conclude as soon as possible, subject to usual closing conditions, such as any merger control and associated clearances that may be necessary. — SG. Watch More: Gulf Tech & News.
