EIG’s $12.4 Billion Acquisition of a 49% Equity Stake in Aramco Oil Pipelines

EIG's $12.4 Billion Acquisition of a 49% Equity Stake in Aramco Oil Pipelines

Latham & Watkins advised EIG on the deal, while White & Case LLP and the Law Office of Megren M. Al-Shaalan have advised the Saudi Arabian Oil Company (Saudi Aramco). Clifford Chance and AS&H advised the lenders.

EIG, a leading institutional investor to the global energy sector and one of the world’s leading infrastructure investors, executed its acquisition of a 49% equity stake in Aramco Oil Pipelines Company (Aramco Oil Pipelines), a joint venture formed with Saudi Arabian Oil Co. (Aramco) to hold a 25-year lease over 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.

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.

The transaction is valued at approximately US$12.4 billion for EIG’s stake, 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.

The lenders to the EIG-led consortium include BNP Paribas, Citibank, First Abu Dhabi Bank, HSBC, J.P. Morgan, Mizuho Bank, MUFG Bank and Sumitomo Mitsui Banking Corporation, in various capacities, including as Mandated Lead Arrangers, Underwriters and Bookrunners.

The Latham team advising EIG was led by London infrastructure partners Conrad Andersen (Picture) and John Guccione, and included London capital markets partner Dean Naumowicz.

The White & Case team which advised Saudi Aramco on the transaction included partners Ivan Paskal (New York & Dubai), Carina Radford (London), Marcus Booth (Dubai & London), Sami Al-Louzi (Dubai), Clark Wohlferd, Gary Kashar (both New York), Carolyn Lamm, Hansel Pham (both Washington, DC), Jacquelyn MacLennan, Strati Sakellariou-Witt (both Brussels), Andrew Kreisberg (Los Angeles), Stuart Matty, Michael Watson (both London), Rob Milne (New York) and Richard Burke (Washington, DC), local partner Sonia Abdul-Rahman (Dubai) and associates Aleksandra Stadnik (Abu Dhabi), Mark Andrews, Catherine Andrews (both London), Tommaso Poli, Giuseppe Tantulli (both Brussels), Hannelore Sklar (Washington, DC) and Adnan Bekdur, Stefan Mrozinski (both Dubai).

The Law Office of Megren M. Al-Shaalan team in Riyadh was led by managing partner Megren Al-Shaalan and included associates Nawaaf Alawaad and Husam Azhar.

The transaction was supported by a cross-office team from Clifford Chance, including from the UAE (Abimbola Lawore, Senior Associate, Daniel Boyle, Senior Associate and Olu Olufemi-White, Trainee), Germany (Nicolas Cookson, Counsel; Coenraad Nolte, Senior Associate; Adéla Hardmeyer, Senior Associate; Opeoluwa Osinubi, Associate and Iryna Karpliuk, Trainee), London (Anne Drakeford, Partner; Charles Wakiwaka, Senior Associate; and Ashan Fernando, Senior Associate), and Luxembourg (Steve Jacoby, Partner; Robert Kuhn, Senior Associate; Angelo Hyka, Associate; Manon Hillenbrand, Associate) and Paris (Elisabeth Bennett, Associate).

The Clifford Chance team was supported by AS&H in Riyadh, led by Yasser Alhussain (AS&H Partner, Head of Banking) and Omar Rashid (Clifford Chance Partner seconded to AS&H) who in turn were supported by Senior Associates Abdulkhaliq Elshayyal and Mazin Al-Zamil and Associates Qasim Rasool and Mohammed Ghazzawi.

Involved fees earner: Yasser Al-hussain – Abuhimed AlSheikh AlHagbani (AS&H); Mazin Al-Zamil – Abuhimed AlSheikh AlHagbani (AS&H); Abdulkhaliq Elshayyal – Abuhimed AlSheikh AlHagbani (AS&H); Omar Rashid – Abuhimed AlSheikh AlHagbani (AS&H); Elisabeth Bennett – Clifford Chance; Daniel Boyle – Clifford Chance; Nicolas Cookson – Clifford Chance; Anne Drakeford – Clifford Chance; Ashan Fernando – Clifford Chance; Adéla Hardmeyer – Clifford Chance; Manon Hillenbrand – Clifford Chance; Angelo Hyka – Clifford Chance; Steve Jacoby – Clifford Chance; Robert Kuhn – Clifford Chance; Abimbola Lawore – Clifford Chance; Coenraad Nolte – Clifford Chance; Opeoluwa Osinubi – Clifford Chance; Charles Wakiwaka – Clifford Chance; Conrad Andersen – Latham & Watkins; John Guccione – Latham & Watkins; Dean Naumowicz – Latham & Watkins; Sami Al-Louzi – White & Case; Megren Al-Shaalan – White & Case; Nawaaf Alawaad – White & Case; Mark Andrews – White & Case; Catherine Andrews – White & Case; Husam Azhar – White & Case; Adnan Bekdur – White & Case; Marcus Booth – White & Case; Gary Kashar – White & Case; Andrew Kreisberg – White & Case; Carolyn Lamm – White & Case; Jacquelyn MacLennan – White & Case; Stuart Matty – White & Case; Robert Milne – White & Case; Stefan Mrozinski – White & Case; Ivan Paskal – White & Case; Hansel Pham – White & Case; Tommaso Poli – White & Case; Carina Radford – White & Case; Strati Sakellariou – White & Case; Hannelore Sklar – White & Case; Aleksandra Stadnik – White & Case; Giuseppe Tantulli – White & Case; Michael Watson – White & Case; Clark Wohlferd – White & Case;

Law Firms: Abuhimed AlSheikh AlHagbani (AS&H); Clifford Chance; Latham & Watkins; White & Case;

Clients: BNP Paribas; Citibank; EIG Global Energy Partners; First Abu Dhabi Bank PJSC; JP Morgan; Mizuho Bank; MUFG Bank, Ltd.; Saudi Aramco; Sumitomo Mitsui Banking Corporation;

Author: Giulia Di Palma