Saudi Aramco is on course to raise about US$17bn by selling off a sizeable minority stake in its gas pipelines. This is more capital than the US$12.4bn the firm raised after selling off the stakes of its oil pipeline operation.
Some of the bids are expected to come from private equity and infrastructure funds across North America. Aramco has also opened talks (via advisors) with state-supported funds from China and South Korea ahead of an official.
The deal volume will involve US$3.5 billion in direct equity selloff, while the balance of the funds will be raised via bank debts. Some sources also indicate that the deal could cross US$20bn.
“The gas deal is about the long-term view of gas utilization and consumption in Saudi Arabia,” said one source close to the transaction, while stating the reason analysts expect the gas deal to be more profitable than the oil deal.
As part of the Kingdom’s Vision 2030, many will turn to sustainable sources of energy, creating momentum upon domestic gas demand can soar.
Aramco has brought on JPMorgan and Goldman Sachs to serve as advisors on the deal and to tap buyers.
Some of the firms tapped include Brookfield, Global Infrastructure Partners (GIP), Singapore sovereign wealth fund GIC, and Europe-based SNAM, all participants in Abu Dhabi National Oil Co’s gas pipelines stake selloff.
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