Aramco Said to Pick JPMorgan, Goldman for Gas Pipeline Deal

Published on : 2021-07-14

Saudi Aramco has chosen JPMorgan Chase & Co. and Goldman Sachs Group Inc. to advise on the planned sale of a multibillion-dollar stake in its natural gas pipeline network, people familiar with the matter said.

The state energy giant is preparing to gauge interest in the assets from potential investors and could kick off the process soon, the people said, asking not to be identified because the information is private. It is likely to attract bids from infrastructure-focused funds, the people said.

Bloomberg News reported last month that Aramco was planning to hire Morgan Stanley for the transaction. It couldn’t immediately be learned why Morgan Stanley wasn’t formally appointed in the end. Bankers sometimes do early preparatory work for companies before they’re officially hired on a deal, and advisers can change due to disagreements over terms of a mandate.

Goldman Sachs ranks first for deal advice in the Middle East and Africa this year, ahead of Morgan Stanley in second and JPMorgan in third, according to data compiled by Bloomberg.

Aramco said last month it completed the sale of a $12 billion stake in its oil pipeline network to a group of investors led by U.S. firm EIG Global Energy Partners LLC. Sovereign fund Mubadala Investment Co., Samsung Asset Management, China’s Silk Road Fund and Saudi government-backed Hassana Investment Co. also joined the purchase.

A deal involving the gas pipelines could be structured in a similar way to the oil pipeline transaction, where investors bought a minority stake in a new Aramco subsidiary with leasing rights over the assets, people with knowledge of the matter have said.

The world’s largest oil company is planning to raise tens of billions of dollars by selling more stakes in its businesses as it seeks to raise funds for future growth projects. Aramco is conducting a strategic review of its upstream business and could consider selling stakes in the operations at certain fields or forming partnerships to develop new resources, Bloomberg News has reported.

No final decisions have been made, and details of the potential gas pipeline transaction could still change, the people said. Representatives for Aramco, Goldman Sachs, JPMorgan and Morgan Stanley declined to comment.

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

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