Riyadh: Saudi Aramco said it has signed a $15.5 billion lease and leaseback deal for its gas pipeline network, led by a consortium black Rock Real assets and Hasna Investment Co. is in its second major infrastructure deal this year.
The deal signed on Monday outlines how Aramco – the kingdom’s cash cow – is seeking to monetise its once-untouchable wealth to generate revenue for the Saudi government as it ramps up efforts to diversify its oil-dependent economy.
In June, Aramco sold a 49 percent stake in its oil pipeline business to a consortium led by US-based EIG Global Energy Partners for $12.4 billion.
Under the new deal, a newly formed subsidiary, Aramco Gas Pipeline Company, will lease use rights in Aramco’s gas pipeline network and lease them back to Aramco for a period of 20 years, the Saudi oil firm said in a statement.
In return, Aramco Gas Pipeline Company will receive tariffs payable by Aramco for gas products flowing through the network, supported by minimum commitments on throughput.
Aramco will own a 51 percent stake in Aramco Gas Pipeline Company and will sell a 49 percent stake to investors led by Saudi state-backed investment management firm BlackRock and Hasna.
“With gas expected to play a key role in the global transition to a more sustainable energy future, our partners will benefit from the deal involving world-class gas infrastructure assets,” said Aramco’s President and CEO. amin nasser said in a statement.
“BlackRock is delighted to be working with Saudi Aramco and Hasna on this historic transaction for Saudi Arabian infrastructure,” said Larry Fink, President and CEO of BlackRock.
“Aramco and Saudi Arabia are taking meaningful, forward-looking steps to transform the Saudi economy toward a renewable energy, clean hydrogen and net zero future.”
The world’s largest oil producer, Aramco, has pledged to achieve net zero carbon emissions in its operations by 2050.
Saudi Arabia, one of the world’s biggest polluters as well as top oil exporter, has pledged to achieve net zero carbon emissions by 2060.
Long viewed as the “crown jewel” of the state, Aramco and its assets were once under government control and considered off-limits to outside investment.
But with the rise of the real ruler Crown Prince Mohammed bin Salman, which is pushing to implement its “Vision 2030” reform program, the state has shown readiness to give up some control.
Aramco sold a portion of its shares on the Saudi exchange in December 2019, generating $29.4 billion in the world’s largest initial public offering.
The deal signed on Monday outlines how Aramco – the kingdom’s cash cow – is seeking to monetise its once-untouchable wealth to generate revenue for the Saudi government as it ramps up efforts to diversify its oil-dependent economy.
In June, Aramco sold a 49 percent stake in its oil pipeline business to a consortium led by US-based EIG Global Energy Partners for $12.4 billion.
Under the new deal, a newly formed subsidiary, Aramco Gas Pipeline Company, will lease use rights in Aramco’s gas pipeline network and lease them back to Aramco for a period of 20 years, the Saudi oil firm said in a statement.
In return, Aramco Gas Pipeline Company will receive tariffs payable by Aramco for gas products flowing through the network, supported by minimum commitments on throughput.
Aramco will own a 51 percent stake in Aramco Gas Pipeline Company and will sell a 49 percent stake to investors led by Saudi state-backed investment management firm BlackRock and Hasna.
“With gas expected to play a key role in the global transition to a more sustainable energy future, our partners will benefit from the deal involving world-class gas infrastructure assets,” said Aramco’s President and CEO. amin nasser said in a statement.
“BlackRock is delighted to be working with Saudi Aramco and Hasna on this historic transaction for Saudi Arabian infrastructure,” said Larry Fink, President and CEO of BlackRock.
“Aramco and Saudi Arabia are taking meaningful, forward-looking steps to transform the Saudi economy toward a renewable energy, clean hydrogen and net zero future.”
The world’s largest oil producer, Aramco, has pledged to achieve net zero carbon emissions in its operations by 2050.
Saudi Arabia, one of the world’s biggest polluters as well as top oil exporter, has pledged to achieve net zero carbon emissions by 2060.
Long viewed as the “crown jewel” of the state, Aramco and its assets were once under government control and considered off-limits to outside investment.
But with the rise of the real ruler Crown Prince Mohammed bin Salman, which is pushing to implement its “Vision 2030” reform program, the state has shown readiness to give up some control.
Aramco sold a portion of its shares on the Saudi exchange in December 2019, generating $29.4 billion in the world’s largest initial public offering.
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