EIG-led group closes $12.4bn Saudi oil pipe deal

US-based EIG Global Energy Partners announced on June 18 that a consortium it is leading had closed the purchase of a 49% stake in Saudi Aramco's oil pipeline network for $12.4bn.

EIG said the co-investment process for the transaction had attracted institutional investors from China, Saudi Arabia, Korea, the UAE and the US. They included Abu Dhabi's Mubadala Investment, China's Silk Road Fund, Saudi Arabia's Hassana and South Korea's Samsung Asset Management.

"The caliber of this marquee global infrastructure asset is further evidenced by the leading investors that have invested alongside EIG," EIG CEO R. Blair Thomas commented. "We are honoured to be working with this world-class consortium and look forward to a long-term, fruitful partnership."

HSBC served as EIG's financial advisor for the transaction, while Latham & Watkins served as its legal advisor.

Aramco will lease back the stake in its Aramco Oil Pipelines, which has rights to 25 years of rate payments for oil supplied through the network. The Saudi oil company is considering a similarly structured deal for the sale of a stake in its natural gas pipeline network, Bloomberg reported on June 10 citing sources.

Aramco has promised to pay $75bn in annual dividends despite the sting to its finances from the pandemic-triggered collapse in oil prices last year. It is looking at divestments to fulfil this promise. The company's net income was down 44% last year at $49bn, on weaker prices and lower production.