Page 6 - MEOG Week 46 2021

MEOG COMMENTARY MEOG

Aramco receives final

gas pipeline bids

Bidders have submitted final offers for a minority stake
in Aramco’s gas pipeline business as the company seeks

to surpass the value achieved for its oil infrastructure.

SAUDI ARABIA SAUDI Aramco is reported to have received With a final decision anticipated in the com-
bids from six companies interested in acquiring ing few weeks, the sources said that the bidders
a minority stake in the company’s gas pipeline are now holding talks about forming a consor-
WHAT: business. tium to acquire the stake in the new Aramco Gas
Aramco is reported to The global slate of investors incudes US-based Pipelines Co. (AGPC).
have received final bids EIG Global Energy Partners and its partners in If, as widely anticipated, the deal follows the
from six companies the consortium that acquired a 49% stake in lead of the oil network, this will grant the win-
keen to acquire a stake Aramco Oil Pipelines Co. (AOPC) for a dura- ning bidder rights to lease the share of the gas
in its large gas pipeline tion of 25 years under a $12.4bn deal earlier this pipeline system’s capacity back to Aramco for the
business. year. Given the resurgence in oil and gas pricing, 25-year period.
Aramco is optimistic that it can achieve a price The Master Gas System network has a total
WHY: in the region of $15-17bn for a similar stake in current capacity of 9.6bn cubic feet (272mn
Three of those bidding the gas pipeline network, which includes the cubic metres) per day following expansion in
are members of the Master Gas System which transports gas from 2017 and 2018.
consortium that acquired the reserve-rich Eastern Province to population An additional expansion phase was due to be
a 49% stake in Aramco’s hubs in Central and Western areas. completed in 2019, taking total capacity to 12.5
oil pipelines business bcf (354 mcm) per day through an additional
earlier this year. Bidders 1,600 km of pipelines to increase gas supplies to
Speaking to Bloomberg this week, sources close the Red Sea coast.
WHAT NEXT: to proceedings said that EIG was joined by However, articles on the Aramco website
Once the gas deal is BlackRock, Brookfield Asset Management, Ita- in October 2020 said that the “next phase”
closed, Aramco is likely ly’s Snam, the Chinese state-backed Silk Road remained under construction, noting the addi-
to turn its attention to Fund and state-owned Saudi fund Hassana tion of 821 km of new pipelines, just over half
the IPO of its retail fuels Investment Co. the amount predicted when it released its 2017
division. Hassana, the investment management arm annual report.
of the kingdom’s General Organisation of Social According to Aramco, “the total length [of]
Insurance (GOSI), the Silk Road Fund and Abu pipeline in service, ready for commissioning,
Dhabi sovereign fund Mubadala have joined or decommissioned, is 3,850 km, and pipelines
EIG in the consortium that bought a stake in the under construction total an additional 1,075
oil pipelines. km.”

P6 www. NEWSBASE .com Week 46 17•November•2021