Thursday, June 24, 2021

Abu Dhabi’s Mubadala invests in Aramco oil pipelines

Abu Dhabi’s sovereign fund Mubadala has confirmed it has joined the consortium of investors that purchased a 49% stake in Saudi Aramco’s crude oil pipeline infrastructure.

Aramco signed the deal with the consortium led by US-based energy infrastructure investment firm EIG Global Energy Partners on 9 April in a transaction valued at $12.4bn. Aramco did not state the names of the other investors in the consortium at the time.

Mubadala “has joined the EIG-led consortium which has entered a transaction with Saudi Arabian Oil Company [Aramco] to acquire a 49% equity stake in the newly formed entity Aramco Oil Pipelines Company”, a company representative said in a statement. “Aramco will retain the remaining 51% stake in the new entity.”

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“The new entity has rights to 25 years of tariff payments for oil transported through Aramco’s stabilised crude oil infrastructure network, backed by minimum volume commitments,” the Mubadala representative told the media.

As part of the April transaction, the newly formed subsidiary, Aramco Oil Pipelines Company, was accorded lease usage rights in Aramco’s stabilised crude oil pipelines network for a 25-year period.

In return, Aramco Oil Pipelines Company will receive a tariff payable by Aramco for the stabilised crude oil that flows through the network, backed by minimum volume commitments.

Aramco will hold the majority 51% stake in the new company and the EIG-led consortium will hold the remaining 49%.

The news follows Aramco’s announcement that it will issue its first US dollar-denominated, sharia-compliant bonds, as it aims to raise funds to boost its finances.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.

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