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EIG shortlisted as possible buyer for Aramco gas pipelines

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© Reuters. FILEPHOTO: A helmet sporting the logo Saudi Aramco’s is seen at Abqaiq oil facility, Saudi Arabia. October 12, 2019. REUTERS/Maxim Shemetov

Davide Barbuscia and Saeed Azhar, Hadeel al Sayegh

RIYADH (Reuters). EIG (a U.S. energy investor) has been identified as a potential buyer Saudi Aramco Three people familiar with the matter stated that gas pipelines (SE) are part of a deal worth more than $17billion and will likely be finished later this year.

According to other sources, Aramco wants to sell its significant minority stake in its pipeline gas plants.

Sources say that EIG is not the only option. Private equity firms such as Apollo may also be possible buyers.

Reuters reached out to Apollo, Aramco, and EIG for clarification.

Aramco approached potential investors, including some who are interested in purchasing a share in Abu Dhabi National Oil Co.’s pipelines.

The consortium that bought it included Brookfield, Global Infrastructure Partners(GIP), Singapore sovereign asset fund GIC, and SNAM (European gas infrastructure operator and owner)

GIP informed Reuters that this week, it won’t bid for Aramco’s pipelines. However, GIP was interested in other assets within the region. Other oil-producing nations want to monetise these assets to fund their transition to a postoil era.

Aramco is in negotiations with banks about a financing package that will cover roughly 80%. It will likely to be underwritten by some banks but will be available to all bidders who wish to finance their purchase. Sources have confirmed this.

Aramco used an earlier lease-back agreement, just like Abu Dhabi National Oil Co. (ADNOC), to sell 49% of the newly created Aramco Oil Pipelines Co. This was done to EIG, which included other investors from China and Korea.

Buyers were entitled to 25-years of tariff payments on oil transported by its pipelines.

According to sources, Aramco’s plan for a gas pipeline deal will be built on the same structure as its existing one.

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