Saudi Aramco, BlackRock sign $15.5 billion gas pipeline deal

Saudi Aramco, BlackRock sign $15.5 billion gas pipeline deal

RIYADH: Saudi Aramco said it has signed a $15.5 billion lease and leaseback agreement for its gas pipeline network with a consortium led by BlackRock Real Assets and Hassana Investment Company in its second major infrastructure deal this year. The deal signed on Monday underscores how Aramco-the kingdom’s cash cow-is seeking to monetize its once-untouchable assets to generate revenue for the Saudi government as it accelerates efforts to diversify the oil-reliant economy.

In June, Aramco sold a 49 percent stake in its oil pipeline business to a consortium led by US-based EIG Global Energy Partners for $12.4 billion. Under the new deal, a newly-formed subsidiary, Aramco Gas Pipelines Company, will lease usage rights in Aramco’s gas pipeline network and lease them back to Aramco for a 20-year period, the Saudi oil firm said in a statement. In return, Aramco Gas Pipelines Company will receive a tariff payable by Aramco for the gas products that flow through the network, backed by minimum commitments on throughput.

Aramco will hold a 51 percent stake in Aramco Gas Pipeline Company and sell a 49 percent stake to investors led by BlackRock and Hassana, a Saudi state-backed investment management firm. “With gas expected to play a key