Saudi Arabian Oil Co. (Aramco) 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 Co., the investment management arm of the General Organization for Social Insurance (GOSI) in Saudi Arabia.
As part of the deal, a newly formed subsidiary, Aramco Gas Pipelines Co., will lease usage rights in Aramco’s gas pipelines network and lease them back to Aramco for a 20-year period. In return, Aramco Gas Pipelines Co. will receive a tariff payable by Aramco for gas products that will flow through the network, backed by minimum commitments on throughput.
Aramco will hold a 51% stake in Aramco Gas Pipeline Co. and will retain full ownership and operational control of its gas pipeline network. The transaction will not impose any restrictions on Aramco’s production volumes.
The gas pipeline transaction is expected to close as soon as practicable, subject to customary closing conditions, including any required merger control and related approvals.
The deal is Aramco’s second such infrastructure transaction this year after the closing of the $12.4 billion lease and leaseback transaction in June with a consortium led by EIG Global Energy Partners, which involved Aramco’s crude oil pipeline network.