Aramco, EIG Sign Infrastructure Investment Deal

Aramco, EIG Sign Infrastructure Investment Deal
Haradh, SAUDI ARABIA: A general view shows a new plant inaugurated 22 March 2006 in Haradh, about 280 kms (170 miles) southwest of the eastern Saudi oil city of Dhahran, launching a project adding 300,000 barrels of oil to the kingdom’s daily production capacity. The facility which was opened today in a ceremony attended by Saudi Oil Minister Ali al-Nuaimi was completed in January, ahead of schedule, the company said. Approximately 160 kms (100 miles) of new pipeline and extensions will transport crude and gas products to processing facilities further north in the Eastern Province, a statement said. Saudi Arabia, the world’s top crude producer and exporter, currently pumps around 9.5 million bpd of oil and has a production capacity of around 11 million bpd. AFP PHOTO/STR (Photo credit should read -/AFP/Getty Images)

Aramco signed infrastructure investment agreement with a consortium led by EIG Global Energy Partners (EIG) through a lease-and-lease-back agreement involving Aramco’s stabilized crude oil pipeline network with about $12.4 billion, according to Aramco’s press release.

Amin H. Nasser, Aramco President & CEO, stated: “This landmark transaction defines the way forward for our portfolio optimization program. We are capitalizing on new opportunities that also align strategically with the Kingdom’s recently-launched Shareek program.”

As part of the agreement, Aramco’s subsidiary, Aramco Oil Pipelines Company, will lease usage rights in Aramco’s stabilized crude oil pipelines network for a 25-year period. Aramco Oil Pipelines Company will acquire a tariff payments for oil transported through Aramco’s crude oil pipeline network, backed by minimum volume commitments.

Aramco will own a 51% majority stake in the new company, while the EIG-led consortium will own the remaining 49% stake. Aramco will retain complete ownership and operational control of its stabilized crude oil pipeline network.

Additionally, Abdulaziz M. Al Gudaimi, Aramco Senior Vice President of Corporate Development, said: “In addition to strengthening our balance sheet, this deal sets a new benchmark for infrastructure transactions both regionally and internationally.”

For his part, R. Blair Thomas, EIG’s Chairman & CEO, mentioned: “We are honored to partner with Aramco, an undisputed industry leader, on this landmark transaction.  Aramco’s oil pipeline network is a marquee global infrastructure asset.”



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