Mubadala joins EIG-led consortium to acquire stake in Aramco pipeline

Abu Dhabi sovereign investor Mubadala Investment has reportedly joined the EIG Global Energy Partners-led group to purchase Saudi Aramco’s stake in newly formed crude oil pipeline entity.

The move follows the signing of a lease and lease-back agreement by EIG-led consortium of investors with Saudi Aramco in April 2021.

As per the deal, the consortium agreed to acquire Aramco’s 49% stake in newly formed Aramco Oil Pipelines Co for approximately $12.4bn.

Saudi Aramco, however, will retain a 51% stake in the new company, which is valued at around $25.3bn.

Aramco Oil Pipelines will operate all the existing and future stabilised crude pipelines of Saudi Aramco in Saudi Arabia. These pipelines connect oilfields to downstream networks.

As part of the terms of the deal, the usage rights in Saudi Aramco’s stabilised crude oil pipelines network will be leased to Aramco Oil Pipelines.

The new entity will also provide Saudi Aramco with the exclusive right to use, transport through and maintain the pipeline network for a 25-year period.

A company representative was reported by TheNational as saying in a statement: “The new entity has rights to 25 years of tariff payments for oil transported through Aramco’s stabilised crude oil infrastructure network, backed by minimum volume commitments.”

The deal is expected to help Saudi Aramco monetise its pipeline assets. The firm, however, intends to retain overall ownership and operational control of its assets, reported the news agency, citing a Mubadala representative.