Saudi Arabia’s oil giant Aramco expects to raise at least $10 billion from a potential sale and leaseback deal for its real estate assets, including its Dhahran Camp residential community in the Eastern Province of the Kingdom, Bloomberg reported on Wednesday, citing sources with knowledge of the plans.
Through a potential deal with real estate and infrastructure funds, Aramco, the world’s top crude exporter and biggest international oil company, continues to look to capitalize on its assets and raise billions of U.S. dollars despite the ongoing conflict in the Middle East.
A deal could bear a resemblance to last year’s midstream infrastructure agreement in which Aramco agreed to an $11-billion deal with an international consortium led by BlackRock. Aramco signed in August an $11 billion lease and leaseback deal involving its Jafurah gas processing facilities. As part of the transaction a newly-formed subsidiary, Jafurah Midstream Gas Company (JMGC), will lease development and usage rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, and lease them back to Aramco for a period of 20 years. JMGC will receive a tariff payable by Aramco in exchange for granting Aramco the exclusive right to receive, process, and treat raw gas from Jafurah, which is the largest non-associated gas development in Saudi Arabia.
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Now a real estate deal could also be a sale and leaseback transaction, allowing Aramco to retain use of its real estate portfolio.
The Saudi oil giant is also considering raising money from deals involving its water infrastructure business and gas-fired power plants, according to some of Bloomberg’s sources.
A few days ago, Aramco reported consensus-beating earnings for the first quarter despite the closure of the Strait of Hormuz for a full month in the quarter, thanks to re-routing exports to the Red Sea.
“Our East-West Pipeline, which reached its maximum capacity of 7.0 million barrels of oil per day, has proven itself to be a critical supply artery, helping to mitigate the impact of a global energy shock and providing relief to customers affected by shipping constraints in the Strait of Hormuz,” CEO Amin Nasser said in comments to the results.
By Charles Kennedy for Oilprice.com
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