This landmark transaction defines the way forward for our portfolio optimisation programme, according to CEO Amin H. Nasser.
Upon closing, Aramco will receive upfront proceeds of around US$12.4 billion, further strengthening its balance sheet through one of the largest energy infrastructure deals globally. The transaction represents a continuation of Aramco’s strategy to unlock the potential of its asset base and maximise value for its shareholders. It also reinforces Aramco’s role as a catalyst for attracting significant foreign investment into the Kingdom.
As part of the transaction, a newly-formed Aramco subsidiary, Aramco Oil Pipelines Company, will lease usage rights in Aramco’s stabilised crude oil pipelines network for a 25-year period. In return, Aramco Oil Pipelines Company will receive a tariff payable by Aramco for the stabilised crude oil that flows through the network, backed by minimum volume commitments. Aramco will hold a 51 per cent majority stake in the new company and the EIG-led consortium will hold a 49 per cent stake. Aramco will continue to retain full ownership and operational control of its stabilised crude oil pipeline network. The transaction will not impose any restrictions on Aramco’s actual crude oil production volumes that are subject to production decisions issued by the Kingdom.
This deal sets a new benchmark for infrastructure transactions both regionally and internationally.
Aramco President & CEO, Amin H. Nasser, said, "This landmark transaction defines the way forward for our portfolio optimisation programme. We are capitalising on new opportunities that also align strategically with the Kingdom’s recently-launched Shareek programme. Aramco’s strong capital structure will be further enhanced with this transaction, which in turn will help maximise 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 M. 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 optimisation programme. This transaction unlocks value from our assets and strengthen Aramco’s resilience, agility and ability to respond to changing market dynamics."
R. Blair Thomas, EIG’s Chairman & CEO, said, "We are honoured 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 to driving value for our institutional investors worldwide."
The long-term investment by EIG and other institutional investors underscores the compelling investment opportunity represented by Aramco’s globally-significant pipeline assets, the Company’s long-term outlook and the attractiveness of the Kingdom of Saudi Arabia as a desirable investment destination for international investors. The transaction is expected to close as soon as practicable, subject to customary closing conditions, including any required merger control and related approvals.
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