Saudi Aramco in $12.4 billion oil pipeline deal with EIG-led group

Saudi Aramco in $12.4 billion oil pipeline deal with EIG-led group

RIYADH: Energy giant Saudi Aramco said it has struck a 12.4-billion-dollar deal to sell a minority stake in a newly formed oil pipeline business to a consortium led by US-based EIG Global Energy Partners. The deal underscores how Aramco-the kingdom's cash cow-seeks to monetize its once-untouchable assets to generate revenue for the Saudi government as it accelerates efforts to diversify the oil-reliant economy. "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,“ the company said in a statement late Friday.

"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.“ The EIG-led consortium will hold a 49 percent stake in the subsidiary, Aramco said, adding that it will retain "full ownership and operational control“.

In a separate statement, EIG, a Washington-based energy investment firm, said the new venture is valued at approximately $25.3 billion. The deal covers all of Aramco's "existing and future stabilized crude pipelines“ in the kingdom, an elaborate network that connects oil fields to downstream facilities, EIG said. "We are proud to partner with Aramco