Aramco concludes $ 12.4 billion investment deal with consortium led by EIG

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Aramco concludes $ 12.4 billion investment deal with consortium led by EIG

It is one of the largest energy infrastructure deals in the world


Friday – 27 Shaaban 1442 AH – April 09, 2021 AD


Saudi Aramco (Middle East)

Dhahran: «Middle East Online»

Saudi Aramco entered into a deal with a consortium led by EIG Global Energy Partners (EIG), one of the most prominent global investors in infrastructure in the energy sector, to achieve the optimum value of its assets through a lease and re-lease agreement related to the Aramco pipeline network. Saudi »crude oil concentrate.
Upon completion of the deal, Saudi Aramco will receive proceeds estimated at $ 12.4 billion, in order to enhance its financial position through one of the largest infrastructure deals in the global energy sector. The deal is an extension of the company’s strategy of optimizing the potential of its assets and maximizing the value for its shareholders. It also strengthens the role played by Saudi Aramco in stimulating and attracting huge foreign investments to Saudi Arabia.
Under the deal, a recently established subsidiary of Saudi Aramco, the Aramco Crude Oil Supply Company, will lease the rights to use Saudi Aramco’s concentrated crude oil pipeline network for a period of 25 years. In return, Aramco Crude Oil Supply Company, in turn, will receive a paid tariff from Saudi Aramco for the quantities of concentrated crude oil that flow through the network, and that tariff is linked to a minimum volume of those quantities.
Saudi Aramco will retain a majority stake of 51 percent in the new company, while the consortium led by EIG will retain a 49 percent stake. At the same time, Saudi Aramco will still fully retain ownership of the pipeline network, and it will continue to have full operational control over it, and this deal will not impose any restrictions on the company in terms of the amount of actual production of crude oil that is subject to the production decisions made by the state.
For his part, the President and Chief Executive Officer of Saudi Aramco, Eng. Amin Al-Nasser, said: “This historic deal constitutes a shift in the field of investment related to improving our business portfolio by taking advantage of new opportunities that are also strategically aligned with the initiative of the (Shrek) program launched by The Kingdom, recently, to promote private sector investments and attract foreign capital ».
He added, “This transaction will enhance the strong capital structure of (Saudi Aramco) and, in turn, help maximize returns for our shareholders. Our long-term partners will benefit in this transaction from investing in one of the strongest and most important infrastructure in the world. We will continue to explore and seize opportunities that support our long-term value creation strategy. ”
For his part, the Senior Vice President of Saudi Aramco for Institutional Development, Eng. Abdulaziz Al-Qadimi, explained that “in addition to strengthening our financial position, this deal sets a new standard for infrastructure deals in the region and at the world level as well, and it is a testament to the confidence of (EI). G) and other investors of high standing in our long-term aspirations, and reflect the great progress we are making in our program to improve the company’s business and projects, as well as it is a deal that brings added value from the company’s assets, and enhances the flexibility, adaptability and responsiveness of Saudi Aramco With changing market conditions ».
In the same context, EIG President and Chief Executive Officer, Robert Blair Thomas, said: “We are honored to partner with (Saudi Aramco) in this historic deal, as it is the undisputed leader in its sector,” indicating that “the network of oil pipelines In (Saudi Aramco) is one of the most prominent infrastructure assets in the world, and we are looking to invest in this infrastructure critical to the global economy, and we are also looking to enhance the value of our institutional investors around the world.
The long-term investment of EIG and other institutional investors highlights the attractive investment opportunity represented by the assets of Saudi Aramco pipelines, the company’s long-term outlook, and the Kingdom’s attractiveness as a desired investment destination by global investors. It is expected that the deal will be completed in the near future, subject to the fulfillment of the customary conditions for the completion of such deals, including the required merger controls and obtaining the related approvals and permits.


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