Page 9 - DMEA Week 08 2022
P. 9
DMEA COMPANIES DMEA
Aramco finalises gas pipe lease,
signs deal with BlackRock
MIDDLE EAST SAUDI Aramco and a consortium of investors phase” remained under construction, noting the
closed a lease and leaseback agreement origi- addition of 821 km of new pipelines, just over
nally announced in December while the oil giant half the amount predicted when it released its
signed a deal with BlackRock to collaborate on 2017 annual report.
energy transition. According to Aramco, “the total length [of]
On December 7, Aramco signed a 20-year pipeline in service, ready for commissioning,
agreement with a consortium jointly led by or decommissioned, is 3,850 km, and pipelines
BlackRock Real Assets and Hassana, the invest- under construction total an additional 1,075
ment management arm of the kingdom’s General km.”
Organisation of Social Insurance (GOSI) worth The conduit is to be expanded to 16.1bcf
$15.5bn. In a February 23 press release, it said (456mcm) per day though no timeframe for
that the consortium now includes Singapore’s this expansion has been announced though
Keppel Infrastructure Trust and China’s Silk Aramco will be joined in the expansion project
Road Fund and China Merchants Capital. by “SABIC, SEC, ACWA Power and companies
For their up-front investment, the consor- from the chemical sector,” according to Energy
tium acquired a 49% stake in Aramco subsidiary Minister Prince Abdulaziz bin Salman Al Saud.
Aramco Gas Pipeline Co. (AGPC). The parties Shortly after urging investors to back sus-
entered into a 20-year lease and leaseback agree- tainable stocks, BlackRock’s Chairman and
ment relating to Aramco’s gas pipeline network CEO Larry Fink said at the time of the deal’s
which includes the giant Master Gas System. announcement: “Aramco and Saudi Arabia are
This will see AGPC receive a tariff from Ara- taking meaningful, forward-looking steps to
mco for gas products transported through the transition the Saudi economy toward renew-
network supported by a minimum throughput ables, clean hydrogen, and a net zero future.
commitment. The parent company retained the Responsibly-managed natural gas infrastructure
majority stake in AGPC as well as full ownership, has a meaningful role to play in this transition.”
operational control and responsibility for the The comments proved prophetic with Ara-
pipeline network. mco announcing this week that it and BlackRock
The Master Gas System network has a total had signed a memorandum of understanding
current capacity of 9.6bn cubic feet (272mn cubic (MoU) “to explore joint opportunities in future
metres) per day following expansion in 2017 and energy transition projects related to low carbon
2018 and transports gas from the reserve-rich energy infrastructure”.
Eastern Province to population hubs in Central Fink was quoted in the press release as say-
and Western areas. ing: “Getting to a net zero world will not happen
An additional expansion phase was due to be overnight. It requires us to shift the energy mix
completed in 2019, taking total capacity to 12.5 in incremental steps to achieve a green energy
bcf (354 mcm) per day through an additional future. Bold, forward-thinking incumbents like
1,600 km of pipelines to increase gas supplies to Aramco have the technical expertise and capital
the Red Sea coast. However, articles on the Ara- to play a crucial role in this transformation, and
mco website in October 2020 said that the “next we look forward to our future collaboration.”
Week 08 24•February•2022 www. NEWSBASE .com P9
