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Saudi Aramco signs US$15.5bn gas pipeline deal with Black Rock (Saudi Arabia)

Saudi Arabia's national oil and gas company Saudi Aramco has signed a US$15.5bn lease and leaseback agreement involving its gas pipeline network with a consortium led by BlackRock and Hassana, the investment management arm of the General Organisation for Social Insurance (GOSI) in Saudi Arabia. As part of the transaction, Aramco will create a new subsidiary, Aramco Gas Pipelines Company, and will sell a 49% stake to the consortium, retaining a 51% majority stake. Aramco Gas Pipelines Company will lease usage rights in Aramco’s gas pipelines network and lease them back to Aramco for a 20-year period. In return, Aramco Gas Pipelines Company will receive a tariff payable by Aramco for the gas products that will flow through the network, backed by minimum commitments on throughput.

Aramco, which has exclusive access to gas exploration and production in the country, will continue to retain full ownership and operational control of its gas pipeline network and the transaction will not impose any restrictions on Aramco’s production volumes. The group will continue to be in charge of the transportation of gas across Saudi Arabia through its Master Gas System, which supplies gas to power plants and large industries. The total length pipeline in service, ready for commissioning, or decommissioned, was 3,850 km at end-2020, and pipelines under construction back then totalled an additional 1,075 km. The marketed gas production is growing rapidly and reached 97 bcm in 2020 (+3%/year since 2010). The production has risen by 2.5 since 2000 and is exclusively consumed domestically.