Regarded as one of the most important energy infrastructure deals, it represents Aramco’s asset optimization program and is the second such infrastructure transaction by Aramco this year after closing the deal. pipeline infrastructure earlier in June 2021.
Upon completion of the pipeline transaction, Aramco will receive initial proceeds of $ 15.5 billion, further strengthening its balance sheet, the statement added.
Larry Fink, CEO of BlackRock, said: “BlackRock is delighted to be working with Saudi Aramco and Hassana on this landmark transaction for Saudi Arabia’s infrastructure. Aramco and Saudi Arabia are taking significant and forward-looking steps to move the Saudi economy towards renewable energy, clean hydrogen and a net zero future.
As part of the transaction, a newly formed subsidiary, Aramco Gas Pipelines Company, will lease the rights to use Aramco’s gas pipeline network and re-lease them to Aramco for a period of 20 years. In return, Aramco Gas Pipelines Company will receive a tariff payable by Aramco for gas products that will pass through the network, backed by minimum throughput commitments.
Aramco will own a controlling 51% stake in Aramco Gas Pipeline Company and sell a 49% stake to investors led by BlackRock and Hassana, which is the investment management arm of the General Social Insurance Organization.
Saad Al-Fadly, CEO of Hassana Investment Company, added: “We are particularly excited about this agreement as it is part of Hasana’s strategy to create lasting value for GOSI and further strengthen our long-term partnerships. duration with solid and reputable players such as Aramco and BlackRock.
According to the statement, Aramco will continue to retain full ownership and operational control of its pipeline network and the transaction will not place any restrictions on Aramco’s production volumes.
Aramco CEO said: “With gas expected to play a key role in the global transition to a more sustainable energy future, our partners will benefit from an agreement tied to a world-class gas infrastructure asset. “
The announcement follows a $ 12.4 billion lease and sale-leaseback transaction in June with a consortium led by EIG Global Energy Partners, which involved Aramco’s stabilized crude oil pipeline system.
Abdulaziz M. Al Gudaimi, Senior Vice President of Business Development at Aramco, said, “We are delighted to complete the second transaction, seeking long-term partners who understand and value the industry. “
The pipeline transaction is expected to close as soon as possible, subject to customary closing conditions, including any required merger control and related approvals.