Page 8 - DMEA Week 40 2021

DMEA FINANCE & INVESTMENT DMEA

Aramco receives

gas pipeline bids

MIDDLE EAST SAUDI Aramco is understood to have received the amount expected when it released its 2017
offers from five companies in the first round of annual report.
bidding for a leased stake in the company’s gas According to Aramco, “the total length [of]
pipeline network, for which it hopes to raise pipeline in service, ready for commissioning,
around $15-17bn. or decommissioned, is 3,850 km, and pipelines
The bidders, according to sources spoken to under construction total an additional 1,075 km”.
by Reuters this week, comprise Apollo Global In September, sources were quoted as
Management, Brookfield Asset Management, saying that Aramco had – through advisors
BlackRock, Global Infrastructure Partners and – approached potential bidders including state-
EIG Global Energy Partners, all of whom were backed Chinese and South Korean funds as well
reported to have been involved in bidding for as North American private equity and infra-
Aramco’s oil pipeline deal in April. structure funds.
The companies are reported to have submit- Reports have quoted an equity figure of
ted non-binding offers for a stake of up to 49% around $3.5bn, with the remainder made up of
in the anticipated Aramco Gas Pipelines Co. bank debt amid rumours of a total deal valuation
(AGPC). If, as widely anticipated, the deal fol- in excess of $20bn; however, the sources quoted
lows the lead of the oil network, this will grant this week said that around $15bn is more likely.
the winning bidder rights to lease the share of the In the case of the oil network, only US-based
gas pipeline system’s capacity back to Aramco for investor EIG Global Partners ended up bidding,
a period of 25 years. leading a consortium to acquire a 49% stake in
Aramco’s Master Gas System network has a Aramco Oil Pipelines Co. (AOPC) for a dura-
total current capacity of 9.6bn cubic feet (272mn tion of 25 years under a $12.4bn deal that grants
cubic metres) per day following expansion in the Saudi firm exclusive rights to use, transport
2017 and 2018. through, operate and maintain the extensive
An additional expansion phase was due to be network.
completed in 2019, taking total capacity to 12.5 For this, it will pay a “quarterly, volume-based
bcf (354 mcm) per day through an additional tariff. This will be backed by minimum volume
1,600 km of pipelines to increase gas supplies to commitments and Aramco will retain full own-
the Red Sea coast. ership of the pipelines.
However, articles on the Aramco website AOPC’s key asset is the massive East-West
in October 2020 said that the “next phase” Pipeline (EWP), which is currently undergoing
remained under construction, noting the addi- a $250mn project to raise capacity from 5mn
tion of 821 km of new pipelines, just over half barrels per day to 7mn bpd.™

P8 www. NEWSBASE .com Week 40 07•October•2021