Saudi Aramco announced in a statement that it has signed a deal with a consortium led by EIG Global Energy Partners (EIG), one of the world’s leading energy infrastructure investors, to optimize its assets through a lease-and-lease-back agreement involving its stabilized crude oil pipeline network.
Upon closing, Aramco will receive upfront proceeds of around $12.4 billion, further strengthening its balance sheet through one of the largest energy infrastructure deals globally.
As part of the transaction, a newly-formed Aramco subsidiary, Aramco Oil Pipelines Company, will lease usage rights in Aramco’s stabilized crude oil pipelines network for a 25-year period.
In return, Aramco Oil Pipelines Company will receive a tariff payable by Aramco for the stabilized crude oil that flows through the network, backed by minimum volume commitments.
Aramco will hold a 51% majority stake in the new company and the EIG-led consortium will hold a 49% stake.
Aramco will continue to retain full ownership and operational control of its stabilized 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.
HSBC Bank plc acted as financial advisor to EIG in connection with the transaction, and Latham & Watkins served as EIG’s legal advisor.
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