Saudi Aramco sells off 49% stake in pipeline business for $12.4bn to EIG-led group

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Saudi Aramco sells off 49% stake in pipeline business for $12.4bn to EIG-led group

Saudi’s state-backed oil giant, Aramco, the world’s most profitable company on an unaudited basis, alongside a consortium led by EIG Global Energy Partners said in a joint statement that the Saudi oil mogul had cut a deal to sell off a 49 per cent stake in its pipeline assets to the business group for $12.4 billion, remarking Aramco’s largest divestiture since it had sold off a minority stake in the company for $29.4 billion in the world’s largest IPO ever in Tadawul on late-2019.

Aside from that, unveiling the financial terms of the deal, the EIG-led consortium said in a separate statement that the business group had entered into an accord with Aramco, according to which the EIG-led business group would hold a 49 per cent stake in a newly formed Aramco pipeline entity, Aramco Oil Pipelines Co., while the consortium would hold the rights to tariff pay-offs on oils transported through Aramco’s pipeline network for 25 years.

Aramco would still own a controlling 51 per cent stake in the company.

Saudi Aramco sells off 49% equity stake in pipeline assets to EIG-led consortium

Meanwhile, the EIG-led business group and Aramco were quoted saying in a statement that the Saudi oil giant would retain all the titles and operational controls of its pipeline networks alongside all operating and capital expense risks, too, branding a win-win scenario for the EIG-led consortium.

Nevertheless, Washington-based investment firm EIG had poured more than $34 billion in energy and related infrastructure projects across the globe. Besides, adding that the deal was aimed at amplifying the value of its assets which in turn would benefit its stakeholders, Aramco said in a separate statement, “The transaction represents a continuation of Aramco’s strategy to unlock the potential of its asset base and maximize value for its shareholders”.