BlackRock, Saudi asset manager Hassana sign deal for Aramco’s gas pipelines

BlackRock, Saudi asset manager Hassana sign deal for Aramco’s gas pipelines

Saudi Aramco said on Monday it has signed a $15.5 billion lease-and-leaseback deal for its gas pipeline network with a consortium led by BlackRock Real Assets and state-backed Hassana Investment Co.

Gulf oil producers are looking at sales of stakes in energy assets and raising cash through long-term leases, capitalizing on a rebound in crude prices to attract foreign investors.

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Earlier this year Aramco sold a 49 percent stake in its oil pipelines to a consortium led by U.S.-based EIG under a similar structure for $12.4 billion.

As part of the latest transaction, a newly formed subsidiary, Aramco Gas Pipelines Co, will lease usage rights in the state energy firm’s gas pipelines network and lease them back to Aramco for a 20-year period, it said.

In return, Aramco Gas Pipelines Co will receive a tariff payable by Aramco for the gas products that will flow through the network, backed by minimum commitments on throughput.

Aramco will hold a 51 percent majority stake in Aramco Gas Pipeline Company and sell a 49 percent stake to investors led by BlackRock and Hassana, the asset management arm of the General Organization for Social Insurance