Saudi Aramco aims to raise at least $17 bln from gas pipeline -sources

NH Investment & Securities Co

16/08/2021 13:06

By Saeed Azhar and Davide Barbuscia
    DUBAI, Aug 16 (Reuters) - Saudi Aramco is looking to raise
at least $17 billion from the sale of a significant minority
stake in its gas pipelines, higher than the $12.4 billion raised
from its oil pipeline deal, sources familiar with the matter
said on Monday.
    Potential bidders including North American private equity
and infrastructure funds, as well as state-backed funds in China
and South Korea have been approached by Aramco through its
advisors before a formal sale process kicks off in the next few
weeks, they said.
    The deal size may include $3.5 billion of equity and the
remainder will be funded by bank debt, one source said, while
another source said the transaction size could top $20 billion.
    Saudi Arabia is the world's sixth largest gas market,
according to Aramco, whose Master Gas System (MGS) derives value
from a range of gas deposits and helps deliver it to consumers. 
   
    "The gas deal is about the long-term view of gas utilisation
and consumption in Saudi Arabia," said one source familiar with
deal, explaining why the gas deal may generate higher proceeds.
    The source said many industries will shift to gas under the
economic Vision 2030, meaning domestic gas demand will rise.
    Aramco is working with JPMorgan  JPM.N  and Goldman Sachs
 GS.N  on the deal to tap potential buyers, sources have said.
    The companies tapped include the ones who took part in the
stake sale process for Abu Dhabi National Oil Co's gas
pipelines, which was bought by a consortium of investors
including Global Infrastructure Partners (GIP), Brookfield,
Singapore sovereign wealth fund GIC and European gas
infrastructure owner and operator SNAM.
    Aramco did not immediately respond to a Reuters request for
comment, while JPMorgan and Goldman declined to comment.
    Brookfield and SNAM declined to comment. GIP did not
immediately respond to a request for comment.
    Other potential bidders showing interest in the Aramco sales
process include China's Silk Road,  Chinese state-backed
investment fund CNIC Corp, South Korea's sovereign wealth fund
Korean Investment Corp (KIC) and NH Investment & Securities,
sources said.
    KIC declined to comment, while the other companies did not
respond to a Reuters request for comment.
    Aramco, similar to Abu Dhabi National Oil Co (ADNOC), used a
lease and lease-back agreement to sell a 49% 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.

 (Additional reporting by Stephen Jewkes in Milan, Cynthia Kim
in Seoul, Kane Wu in Hong Kong and Anshuman Daga in Singapore;
editing by David Evans)
 ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters
Messaging: saeed.azhar.reuters.com@reuters.net))