Aramco evaluates the sale of its stake in gas pipelines


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Saudi Aramco is considering selling a stake in its extensive pipeline network to help free up money and attract more international investors to the kingdom, people familiar with the matter said.

The state-owned power producer is holding preliminary talks on the potential move, people said, asking not to be identified as the information is private. Any deal could earn Dhahran-based Aramco billions of dollars depending on how a deal is structured, according to people.

Aramco is at the forefront of Saudi Arabia‘s drive to attract foreign investment and diversify its economy. Earlier this month, he announced he would raise more than $ 12 billion by selling a stake in his pipeline unit to a consortium led by EIG Global Energy Partners.

The company is also conducting a strategic review of its upstream activities in a move that could see it introduce outside investors in some of its oil and gas assets, Bloomberg News reported last week. Aramco chairman Yasir Al-Rumayyan has started selling stakes in non-core assets to help maintain the company’s $ 75 billion dividend, most of which goes to the Saudi government.

Aramco’s Master Gas System is a network of pipelines connecting its production to processing sites throughout the kingdom. The infrastructure has a current capacity of about 9.6 billion cubic feet per day, according to Aramco’s annual report.

Deliberations are at an early stage and there is no certainty that Aramco will proceed with a transaction, the people said. Aramco, which is officially known as Saudi Arabian Oil Co., declined to comment.

The company reshuffled its leadership last year and created a division focused on “portfolio optimization,” which “will assess existing assets” and improve access to growing markets. It is headed by Abdulaziz Al Gudaimi, who reports to Managing Director Amin Nasser.

Saudi Arabia has the eighth largest gas reserves in the world and the largest in the Arab world after Qatar, according to BP. They have mostly been overlooked by the kingdom as it has instead focused on its huge oil fields. In recent years, the government has sought to increase gas production – which reached an all-time high in 2020 – to diversify the economy and transition to cleaner fuels for local power plants.

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