Aramco closes $15.5 billion gas pipeline deal with global investor consortium

An international investor consortium led by affiliates of BlackRock and Hassana has acquired 49 percent stake in Aramco Gas Pipelines Company, a subsidiary of Aramco, for $15.5 billion, the company announced on Wednesday.

The consortium comprises leading institutional investors including Keppel Infrastructure Trust, Silk Road Fund, and China Merchants Capital, and the announcement marks the successful closure of the lease and leaseback deal announced on December 6, 2021.

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 this arrangement, Aramco Gas Pipelines Company will receive a tariff payable by Aramco 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 also retains full ownership and operational control of the gas pipeline network. The transaction does not impose any restrictions on Aramco’s production volumes.

“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,” Aramco President and CEO, Amin H. Nasser, said in a statement.

The long-term investment also underlines Aramco’s strong long-term outlook and the appeal of the Kingdom of Saudi Arabia to leading institutional investors, the company said.

The announcement follows the closing of a $12.4 billion infrastructure transaction in connection with Aramco’s stabilized crude oil pipeline network in June 2021.

Aramco has also signed a memorandum of understanding (MoU) with BlackRock, to explore joint opportunities in future energy transition projects related to low carbon energy infrastructure. The MoU reinforces the relationship with BlackRock, enhancing opportunities for possible future collaborations.