Saudi oil giant Aramco announces the signing of a $15.5 billion agreement with a consortium led by asset manager BlackRock for the use of its gas pipeline network.
Aramco and BlackRock create Aramco Gas Pipelines Company
Under the terms of the contract, a joint venture will be created, Aramco Gas Pipelines Company, owned 51% by Aramco and 49% by the consortium led by BlackRock.
Aramco Gas Pipelines will lease the rights to use Aramco’s pipeline network for a period of 20 years, the Saudi group said in a statement, adding that it would retain “full ownership and control” of the network.
The deal is expected to generate $15.5 billion (around 13.73 billion euros) for the Saudi group, which will in return pay the joint venture usage rights on the volume of crude transiting the network.
After pipelines
This is the second major infrastructure contract of the year for the oil giant, following the signing in April of a similar contract for the use of its pipelines with a consortium led by US-based EIG Global Energy Partners for $12.4 billion.
In recent years, Aramco has spearheaded the diversification of the kingdom’s hydrocarbon-dependent economy.
Oil revenues finance part of the mega-projects spearheaded by Crown Prince Mohammed ben Salmane as part of the “Vision 2030” plan.
“With gas set to play a key role in the global transition to a more sustainable energy future, our partners will benefit from a transaction linked to a world-class gas infrastructure asset,” says Aramco Chairman and CEO Amin Nasser in a statement.
With the Covid-19 pandemic having weighed on oil demand, accentuating the drop in black gold prices, at the end of March 2021 the kingdom asked major Saudi companies, including Aramco, for an extra effort to stimulate the private sector as part of a mega-investment plan dubbed “Shareek” (partner in Arabic).
