Saudi Aramco to sell 49% stake in new oil pipelines subsidiary for $12.4bn to EIG-led consortium

Saudi Aramco has signed a deal worth around $12.4 billion with a consortium led by energy infrastructure investor EIG Global Energy Partners to sell a 49% stake in Aramco Oil Pipelines Company, which will hold its crude oil pipeline assets.

The Saudi Arabian national oil company said that the deal further consolidates its balance sheet and is part of its strategy to tap into the potential of its asset base and maximize value for the group’s shareholders. The company will retain a 51% stake and operational control in the new crude oil pipeline subsidiary.

Abdulaziz M. Al Gudaimi – Saudi Aramco Senior Vice President of Corporate Development said: “In addition to strengthening our balance sheet, this deal sets a new benchmark for infrastructure transactions both regionally and internationally. It is a vote of confidence in our long-term outlook by EIG and other heavyweights in the investment world and reflects the significant progress we are making in our portfolio optimization program.

“This transaction unlocks value from our assets and strengthen Aramco’s resilience, agility and ability to respond to changing market dynamics.”

Saudi Aramco to sell 49% stake in new oil pipelines subsidiary for $12.4bn to a consortium led by EIG Global Energy Partners. Photo courtesy of Saudi Arabian Oil Co.

Aramco Oil Pipelines Company will lease usage rights in Saudi Aramco’s crude oil pipelines network for a 25-year period. The new subsidiary will get a tariff payable by Saudi Aramco for the stabilized crude oil that is transported through the pipeline network, which is underpinned by minimum volume commitments.

According to Saudi Aramco, the deal will not put any curbs on its actual crude oil production volumes that are contingent on production decisions issued by the Saudi Arabian government.

R. Blair Thomas – EIG Global Energy Partners Chairman and CEO said: “We are honored to partner with Aramco, an undisputed industry leader, on this landmark transaction.

“Aramco’s oil pipeline network is a marquee global infrastructure asset. We look forward to investing in this infrastructure which is critical to the global economy, and to driving value for our institutional investors worldwide.”

Subject to any required merger control and associated approvals, and other customary closing conditions, the deal is likely to close as early as practicable, said Saudi Aramco.