EIG's US$12.4 Billion Infrastructure Deal with Aramco led by Latham & Watkins

EIG's US$12.4 Billion Infrastructure Deal with Aramco led by Latham & Watkins

Latham & Watkins advised EIG, a leading institutional investor to the global energy sector and one of the world's leading infrastructure investors, on its acquisition of equity stake in Aramco Oil Pipelines Company ("Aramco Oil Pipelines"), a joint venture formed with Saudi Arabian Oil Co. ("Aramco").

The EIG-led consortium shall hold a 49% equity stake with rights to 25-years of tariff payments for oil transported through Aramco's stabilized crude oil pipeline network. The pipeline network, which includes all of Aramco's existing and future stabilized crude pipelines in the Kingdom of Saudi Arabia, connects oilfields to downstream networks.

The value of the transaction is approximately US$12.4 billion, with Aramco holding the remaining 51% stake in the new entity, indicating a total equity value of Aramco Oil Pipelines of approximately US$25.3 billion.

As part of the transaction, Aramco will lease the usage rights in its pipeline network to Aramco Oil Pipelines, and Aramco Oil Pipelines will grant back to Aramco the exclusive right to use, transport through, operate and maintain the pipeline network for 25 years. In exchange, the joint venture will receive a quarterly, volume-based tariff, payable by Aramco and backed by minimum volume commitments. Aramco will at all times retain operational control of the pipeline network and will assume all operating and capital expense risk.

EIG is a leading institutional investor to the global energy sector specializing in private investments in energy and energy-related infrastructure on a global basis. Headquartered in Washington, D.C. EIG has offices in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul.

Aramco is a Saudi Arabian public petroleum and natural gas company. It is a global integrated energy and chemicals company.

The team from Latham& Watkins was led by London infrastructure partners Conrad Andersen and John Guccione, and included London capital markets partner Dean Naumowicz.