Saudi Aramco has invited banks to pitch for an advisory role to help finance the sale of a significant minority stake in its natural gas pipelines, the oil giant’s second major midstream deal after a $12.4 billion deal for oil pipelines, three sources said.
Aramco has already hired Morgan Stanley as an advisor and the financing advisory role is up for grabs among banks, two of the sources said.
The gas pipeline stake sale will be a “copy paste” of the oil pipeline deal, one of the sources said.
Aramco used a lease and lease-back agreement to sell a 49 percent stake of newly formed Aramco Oil Pipelines Co to the buyer and rights to 25 years of tariff payments for oil carried on its pipelines.
The pipeline deal was backed by nearly $11 billion in debt underwritten by eight banks and subsequently syndicated to an additional 10 banks, two sources told Reuters.
Japanese lender MUFG advised on the financing for the oil pipeline assets and was in a strong position for the new role, though Aramco has not made any decision yet, the two sources said.
Aramco, Morgan Stanley and MUFG didn’t comment.
Aramco’s sale of a minority stake in its oil pipelines for $12.4 billion to a consortium led by EIG Global Energy Partners was its largest deal since a record $29.4 billion IPO in late 2019.
The financing for that deal is expected to be taken out by bonds across two or three deals, with the first expected in the first quarter of 2022.
The gas pipeline deal financing is also expected to be taken out with bonds, one of the sources said.
The structure follows similar deals by Abu Dhabi National Oil Co, which has raised billions of dollars through sale-and-leaseback deals of its oil and gas pipeline assets.
Saudi Arabia is the world’s sixth-largest gas market, according to Aramco, whose Master Gas System derives value from its range of gas deposits and helps deliver it to consumers.
Oil storage facility of Saudi Aramco Photo: Xinhua
