Saudi Aramco, the leading oil-exporting company in the world, has chosen JP Morgan and Goldman Sachs as advisors for the sale of its gas pipelines, replacing Morgan Stanley.
The state-owned company is preparing to test investor interest in the assets and could begin the process soon. It is likely to attract bids from infrastructure-focused funds, according to reports.
JPMorgan had assisted Aramco with the sale of its oil pipeline business, which was sold for $12.4 billion to a consortium led by EIG Global Energy Partners of Washington, DC. Sovereign fund Mubadala Investment, Samsung Asset Management, China’s Silk Road Fund and Saudi government-backed Hassana Investment also joined the purchase.
According to reports, Aramco has also requested banks to advise on the financing of the purchase, the second big midstream transaction after the selling of oil pipelines.
Aramco plans to raise tens of billions of dollars by selling more ownership in its subsidiaries as it aims to raise funds for future expansion projects. Aramco is conducting a strategic evaluation of its upstream sector, with the possibility of selling ownership in specific assets or forging partnerships to explore new resources.
Morgan Stanley, which was one of the top advisors on Aramco’s $29.4 billion Initial Public Offering in 2019, also missed out on the oil pipeline advisory role.
Aramco used a lease-and-lease-back agreement to sell a 49 percent stake in the newly formed Aramco Oil Pipelines to the buyer, as well as rights to 25 years of tariff payments for oil transported through its pipelines.
Aramco’s Master Gas System is a network of pipes that connects its output to production plants across the kingdom. According to Aramco’s annual report, the infrastructure has a capacity of 9.6 billion cubic feet per day.