RIYADH, Dec 7, 2021 (BSS/AFP) – Saudi Aramco said it has signed a $15.5
billion lease and leaseback deal for its gas pipeline network with a
consortium led by BlackRock Real Assets and Hassana Investment Company in its
second major infrastructure deal this year.
The deal signed on Monday underscores how Aramco — the kingdom’s cash cow
— is seeking to monetise its once-untouchable assets to generate revenue for
the Saudi government as it accelerates efforts to diversify the oil-reliant
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 Pipelines
Company, will lease usage rights in Aramco’s gas pipeline network and lease
them back to Aramco for a 20-year period, the Saudi oil firm said in a
statement. In return, Aramco Gas Pipelines Company will receive a tariff
payable by Aramco for the gas products that flow through the network, backed
by minimum commitments on throughput.
Aramco will hold a 51 percent stake in Aramco Gas Pipeline Company and sell
a 49 percent stake to investors led by BlackRock and Hassana, a Saudi state-
backed investment management firm.
“With gas expected to play a key role in the global transition to a more
sustainable energy future, our partners will benefit from a deal tied to a
world-class gas infrastructure asset,” Aramco president and CEO Amin Nasser
said in a statement.
“BlackRock is pleased to work with Saudi Aramco and Hassana on this
landmark transaction for Saudi Arabia’s infrastructure,” BlackRock chairman
and CEO Larry Fink said.
“Aramco and Saudi Arabia are taking meaningful, forward-looking steps to
transition the Saudi economy toward renewables, clean hydrogen, and a net
Aramco, the world’s biggest oil producer, 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 the top oil
exporter, has also pledged to achieve net zero carbon emissions by 2060.
Long seen as the kingdom’s “crown jewel”, Aramco and its assets were once
tightly under government control and considered off-limits to outside
But with the rise of de facto ruler Crown Prince Mohammed bin Salman, who
is pushing to implement his “Vision 2030” reform programme, the kingdom has
shown readiness to cede some control.
Aramco sold a sliver of its shares on the Saudi bourse in December 2019,
generating $29.4 billion in the world’s biggest initial public offering.