Consortium acquires 49% stake in Aramco Gas Pipelines Co for $15.5 billion

Dhahran, Saudi Arabia: An international consortium has acquired a 49 per cent stake in Aramco Gas Pipelines Company, an Aramco subsidiary, for $15.5 billion, it was announced on Wednesday.

The consortium, led by affiliates of BlackRock and Hassana, comprises institutional investors including Keppel Infrastructure Trust, Silk Road Fund, and China Merchants Capital.

Aramco retains a 51 per cent majority stake in the company, and also retains full ownership and operational control of the gas pipeline network. Also, the transaction does not impose any restrictions on Aramco’s production volumes.

As part of the transaction, first announced in December 2021, 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.

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

Aramco has also signed a memorandum of understanding with BlackRock to explore joint opportunities in future energy transition projects related to low carbon energy infrastructure.

Aramco president & CEO, Amin H. Nasser, said: “The participation of the consortium led by BlackRock and Hassana underlines the appeal of Aramco’s portfolio to leading global investors as Saudi Arabia’s economic transformation builds momentum, requiring a robust energy infrastructure and network that are vital to meet the needs of an expanding industrial sector.

“At the same time as Aramco raises gas production and seeks new opportunities in low-carbon energy sources over the next decade, the importance of our energy infrastructure in relation to global energy security and reliability is expected to grow in significance.”

Larry Fink, chairman and CEO of BlackRock, said: “We are pleased to close this landmark transaction and deepen our partnership with Aramco by signing an MoU to develop low carbon energy infrastructure together. Getting to a net zero world will not happen overnight.

“It requires us to shift the energy mix in incremental steps to achieve a green energy future. Bold, forward-thinking incumbents like Aramco have the technical expertise and capital to play a crucial role in this transformation, and we look forward to our future collaboration.”