Page 4 - MEOG Week 28 2021

MEOG COMMENTARY MEOG

Aramco moves on second pipe deal

as asset monetisation continues

The Saudi oil giant has made progress on its second asset
monetisation deal, with future moves in the pipeline.

SAUDI ARABIA SAUDI Aramco was this week reported to have Aramco’s Master Gas System network has a
invited banks to pitch for work on a deal to mon- total current capacity of 9.6bn cubic feet (272mn
etise its gas pipeline network in much the same cubic metres) per day following an expansion in
WHAT: way it did for oil. Meanwhile, the company’s 2017 and 2018.
Saudi Aramco is senior vice-president for corporate development An additional expansion phase had been due
proceeding with work was quoted as saying that such moves would not to be completed in 2019, taking total capacity to
to close a multi-billion be reliant on market conditions, suggesting that 12.5 bcf (354 mcm) per day through an addi-
dollar deal to lease out Saudi Aramco intends to continue developing its tional 1,600 km of pipelines to increase gas sup-
and rent back its gas relationship with investors. plies to the Red Sea coast. However, articles on
pipeline infrastructure. Speaking to Reuters, sources said that Ara- the Aramco website in October 2020 said that
mco is seeking a bank for the financing advisory the “next phase” remained under construction,
WHY: role as the company seeks to replicate the success noting the addition of 821 km of new pipelines,
Having already closed a achieved when it closed a $12.4bn deal in April just over half the amount anticipated when it
$12.4bn deal for its oil for a consortium led by EIG Global Partners to released its 2017 annual report.
pipelines, the company acquire a 49% stake in Aramco Oil Pipelines Co. According to Aramco, “the total length [of]
is keen to leverage its (AOPC) for a duration of 25 years. pipeline in service, ready for commissioning,
extensive gas network to Meanwhile, Morgan Stanley was first or decommissioned, is 3,850 km, and pipelines
yield a similar result. reported to have been appointed as M&A under construction total an additional 1,075
adviser, then to have been removed from the role km.”
WHAT NEXT: with Goldman Sachs and JPMorgan brought in
Aramco has several as replacement with the latter having advised on Strategy
other business lines and the oil pipelines lease agreement. Meanwhile, Abdulaziz al-Gudaimi, former SVP
subsidiaries which may Under that deal, the Saudi firm will be liable of Downstream and now SVP of Corporate
be next on the block as for all maintenance and to make rate payments Development, a division established in August
the company seeks to for crude transferred through the extensive pipe- last year tasked with asset oversight and improv-
add value while retaining line network. The gas pipeline deal – for Aramco ing access to growth markets and technologies,
near complete control. Gas Pipelines Co. (AGPC) – will be a “copy told Bloomberg that Aramco is reviewing assets
paste” of the oil network arrangement. that can be monetised ahead of seeking investors

P4 www. NEWSBASE .com Week 28 14•July•2021