The Saudi Arabian Oil Company (Saudi Aramco) has said in a statement that it has signed a $15.5-billion lease and leaseback deal involving its gas pipeline network with a consortium led by BlackRock Real Assets and Hassana Investment Company.
Hassana is the investment management arm of the General Organization for Social Insurance (GOSI) in Saudi Arabia.
The agreement leads to the formation of a subsidiary called the Aramco Gas Pipelines Company.
Aramco said the deal represents significant progress in its asset optimization program, and that it is the second such infrastructure transaction by Aramco this year after the closing of the oil pipeline infrastructure deal earlier in June 2021.
Upon completion of the gas pipeline transaction, Aramco is expected to receive upfront proceeds of $15.5 billion.
The deal apparently unlocks additional value from Aramco’s diverse asset base, and is said to have attracted interest from a wide range of worldwide investors.
Aramco Gas Pipelines Company will lease usage rights in Aramco’s gas pipelines network and lease them back to Aramco for a 20-year period.
In return, it will receive a tariff payable by Aramco for the gas products that will flow through the network, backed by minimum commitments on throughput.
Aramco said it would hold a 51 percent majority stake in Aramco Gas Pipeline Company, and sell a 49 percent stake to investors led by BlackRock and Hassana.
Aramco will continue to retain full ownership and operational control of its gas pipeline network and the transaction will not impose any restrictions on Aramco’s production volumes.
Aramco has said it is fully committed to sustainable practices and is an industry leader in reducing greenhouse gas emissions.
The announcement follows a $12.4-billion lease and leaseback transaction concluded in June with a consortium led by EIG Global Energy Partners, which involved Aramco’s stabilized crude oil pipeline network.