Mubadala joins with EIG-led consortium acquiring Aramco pipeline stake

By Shilpa Annie Joseph, Official Reporter
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Abu Dhabi state-owned sovereign wealth fund, Mubadala has joined a consortium led by US-based EIG Global Energy Partners that had agreed to buy a 49 percent equity stake in Aramco Oil Pipelines.

Aramco has agreed in April to sell a minority stake in its pipelines to a consortium led by EIG for $12.4 billion, the company’s largest deal since its record $29.4 billion IPO in late 2019.

Mubadala “has joined the EIG-led consortium which has entered into a transaction with Saudi Arabian Oil Company (Aramco) to acquire a 49 percent equity stake in the newly formed entity Aramco Oil Pipelines Company. Aramco will retain the remaining 51 percent stake in the new entity,” a company representative said in a statement.

As per the reports, “The new entity has rights to 25 years of tariff payments for oil transported through Aramco’s stabilized crude oil infrastructure network, backed by minimum volume commitments.”

The deal enables Aramco, the world’s third-most valuable company, to monetize its pipeline assets while maintaining overall ownership and operational management of the network. According to the Mubadala spokesman, it does not place any constraints on Aramco’s crude oil output volumes, which are established by the kingdom itself.

Aramco, which made a profit of $49 billion (183.7 billion Saudi riyals) in 2020, reported earlier this week that it intends to join the debt capital markets by issuing dollar-denominated sukuk. It did not disclose how much it plans to raise but claimed the money would be used “for general company activities or any other purpose indicated” in the sukuk offer paperwork.

Related: Aramco’s loans to be refinanced with bonds by its pipeline investors