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Saudi Arabian Oil Co. (Aramco) signed a $15.5 billion lease and leaseback deal involving its gas pipeline network with a consortium led by BlackRock Real Assets (BlackRock) and Hassana Investment Company (Hassana), 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 optimization program and is the second such infrastructure transaction by Aramco this year after the closing of the oil pipeline infrastructure deal earlier in June 2021, Aramco said in a statement received by Argaam.
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, highlighting the compelling investment opportunity.
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, backed by minimum commitments on throughput.
Aramco will hold a 51% majority stake in Aramco Gas Pipeline Company and sell a 49% 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.
The gas pipeline transaction is expected to close as soon as practicable, subject to customary closing conditions, including any required merger control and related approvals.
“Today, we have reached yet another major milestone in our portfolio optimization program as we build towards a bigger and stronger gas business. It further underscores our commitment to long-term value creation for our shareholders,” said Amin HNasser, Aramco President and CEO.
while bringing in BlackRock and Hassana as partners demonstrates our unique value proposition and ability to attract leading global investors to Saudi Arabia. With gas expected to play a key role in the global transition to a more sustainable energy future, our partners will benefit from a deal tied to a world-class gas infrastructure asset.”
The announcement follows a $12.4 billion lease and leaseback transaction concluded in June with a consortium led by EIG Global Energy Partners, which involved Aramco’s stabilized crude oil pipeline network.
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