3 Minutes Read by, DUBAI, United Arab Emirates (Reuters) – According to three sources, Saudi Aramco has invited banks to compete for an advisory role in the sale of a significant minority stake in its gas pipelines, the oil giant’s second major midstream deal after a $12.4 billion deal for oil pipelines. A Saudi Aramco employee is pictured in the Empty Quarter, Saudi Arabia, on May 22, 2018, at the Natural Gas Liquids (NGL) facility in Aramco’s Shaybah oilfield. REUTERS/File Photo/Ahmed Jadallah According to two sources, Aramco has already hired Morgan Stanley as an M&A advisor, and the financing advisory post is up for grabs among banks. According to one of the sources, the gas pipeline stake sale will be a “copy paste” of the oil pipeline deal. Aramco used a lease-and-lease-back deal to sell a 49 percent interest in the newly formed Aramco Oil Pipelines Co to the buyer, as well as rights to 25 years of tariff payments for oil transported through its pipelines. Two sources previously told Reuters that the pipeline deal was backed by approximately $11 billion in debt guaranteed by eight banks and then syndicated to an additional ten banks. According to the two individuals, Japanese lender MUFG advised on the financing for the oil pipeline assets and was in a great position for the new job, even if Aramco had not made a decision yet. Aramco did not respond to a request for comment from Reuters right away. Morgan Stanley and MUFG did not respond to requests for comment. Aramco’s selling of a minority stake in its oil pipelines to a consortium led by EIG Global Energy Partners for $12.4 billion was the company’s biggest deal since a record $29.4 billion IPO in late 2019. The transaction was completed on June 20. The money for that deal is expected to come from two or three bonds, the first of which will be issued in the first quarter of 2022. According to one of the sources, the funding for the gas pipes purchase will also be done with bonds. Abu Dhabi National Oil Co (ADNOC), which has raised billions of dollars through sale-and-leaseback arrangements of its oil and gas pipeline assets, has used a similar structure. According to Aramco, which earns value from its range of gas resources and helps distribute it to consumers, Saudi Arabia is the world’s sixth largest gas market. Saeed Azhar, Hadeel Al Sayegh, and Yousef Saba contributed reporting, while David Evans edited the piece. Continue reading
