Aramco Oil Pipeline Group Readies Multi-Billion Dollar Bond
A group of investors in Saudi Aramco’s oil pipelines is preparing to sell billions of dollars of bonds as soon as this week, according to people familiar with the matter.
The consortium, led by Washington-based EIG, may raise at least $4.5 billion, three of the people said.
Citigroup Inc. and JPMorgan Chase & Co. will be among the banks managing the sale, the people said, asking not to be named because the matter is private. The debt will be used to refinance a loan of about $10.5 billion taken on to fund the pipeline investment.
EIG and Aramco declined to comment.
China’s Silk Road Fund and Abu Dhabi sovereign wealth fund Mubadala Investment Co. were also part of the consortium. It paid $12.4 billion for a 49% stake in an Aramco subsidiary that has leasing rights over the pipelines. The deal was completed in June.
Aramco Oil Pipelines has rights to 25 years of tariff payments for flows through the state energy giant’s network.
The word’s largest oil company is looking for new ways to raise cash to maintain a $75 billion dividend and complete huge investment plans. Over the coming decade Aramco is developing the multi-billion dollar Jafurah natural-gas field, expanding its oil-production capacity to 13 million barrels a day and investing in hydrogen production.
It’s also selling a stake in its gas pipelines. Brookfield Asset Management Inc. and Italian energy infrastructure operator Snam SpA were among the companies to place first-round bids.
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