Saudi Aramco and BlackRock sign $ 15.5 billion gas pipeline deal, Auto News, ET Auto
Saudi Aramco says it has signed a $ 15.5 billion lease and leaseback agreement for its pipeline network with a consortium led by BlackRock Real Assets and Hassana Investment Company as part of its second major infrastructure deal This year.
The deal signed on Monday highlights how Aramco – the kingdom’s cash cow – seeks to monetize its once untouchable assets to generate revenue for the Saudi government as it ramps up efforts to diversify the oil-dependent economy.
In June, Aramco sold a 49% stake in its pipeline business to a consortium led by US-based EIG Global Energy Partners for $ 12.4 billion.
Under the new agreement, 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, the Saudi oil company said in a statement. communicated.
In return, Aramco Gas Pipelines Company will receive a tariff payable by Aramco for gas products passing through the network, backed by minimum throughput commitments.
Aramco will own a 51% stake in Aramco Gas Pipeline Company and sell a 49% stake to investors led by BlackRock and Hassana, a Saudi state-backed investment management firm.
“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 linked to a world-class gas infrastructure asset,” said Aramco Chairman and CEO, Amin Nasser, in a statement.
“BlackRock is delighted to be working with Saudi Aramco and Hassana on this landmark transaction for Saudi Arabia’s infrastructure,” said Larry Fink, President and CEO of BlackRock.
“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.”
Aramco, the world’s largest oil producer, has committed to achieving zero net carbon emissions in its operations by 2050.
Saudi Arabia, one of the world’s biggest polluters and the world’s largest oil exporter, has also pledged to achieve net zero carbon emissions by 2060.
Long regarded as the kingdom’s “crown jewel”, Aramco and its assets were once tightly controlled by the government and viewed as off limits to outside investment.
But with the rise of Crown Prince Mohammed bin Salman, who is pushing to implement his “Vision 2030” reform program, the kingdom has shown itself ready to cede some control.
Aramco sold part of its shares on the Saudi Stock Exchange in December 2019, generating $ 29.4 billion in the world’s largest initial public offering.