Aramco sells 49% stake of its newly formed subsidiary to EIG-led group

By Shilpa Annie Joseph, Official Reporter
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Saudi Aramco
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The world’s largest oil-exporting company Saudi Aramco has signed a $12.4 billion deal with a consortium led by EIG Global Energy Partners (EIG) that gives the group a 49 percent stake in the oil giant’s pipeline assets.

According to the reports, “This is the first major deal by Aramco since its listing in late 2019 when the Saudi government sold a minority stake in the firm for $29.4 billion in the world’s biggest initial public offering.”

The company said in a statement that Aramco Oil Pipelines Company, a newly established Aramco subsidiary, will lease usage rights in Aramco’s stabilized crude oil pipeline network for a 25-year term. The subsidiary company will be paid a tariff for the oil that flows through the network, which will be backed up by minimum volume commitments.

Aramco will own a 51 percent majority stake in the new entity, while the EIG-led consortium will own a 49 percent stake. The oil giant will continue to retain full ownership and operational control of its stabilized crude oil pipeline network.

Amin Nasser Image
Amin Nasser
President & CEO
Saudi Aramco

“This landmark transaction defines the way forward for our portfolio optimization program. We are capitalizing on new opportunities that also align strategically with the Kingdom’s recently launched Shareek program. Aramco’s strong capital structure will be further enhanced with this transaction, which in turn will help maximize returns for our shareholders. Additionally, our long-term partners in this venture will benefit from investment in one of the world’s most robust energy infrastructures. Moving forward, we will continue to explore opportunities that underpin our strategy of long-term value creation.”

Abdulaziz Al Gudaimi, Aramco Senior Vice President of Corporate Development said, “In addition to strengthening our balance sheet, this deal sets a new benchmark for infrastructure transactions both regionally and internationally. It is a vote of confidence in our long-term outlook by EIG and other heavyweights in the investment world and reflects the significant progress we are making in our portfolio optimization program. This transaction unlocks value from our assets and strengthens Aramco’s resilience, agility, and ability to respond to changing market dynamics.”

“We are honored to partner with Aramco, an undisputed industry leader, on this landmark transaction. Aramco’s oil pipeline network is a marquee global infrastructure asset. We look forward to investing in this infrastructure which is critical to the global economy, and driving value for our institutional investors worldwide,” commented Robert Blair Thomas, Chairman, and CEO at EIG.

The transaction is expected to close as soon as possible, subject to customary closing conditions, such as any merger control and related approvals that may be necessary, as per the reports.

Related: US-based Apollo Global eyeing a $10bn stake in Aramco’s pipeline unit