DUBAI - Saudi Aramco is looking at raising at least $17 billion from the sale of a significant minority stake in its oil pipelines, higher than the $12.4 billion raised from its gas pipeline deal, sources familiar with the matter said on Monday.
Potential bidders including state-backed capital and infrastructure funds, as well as North American private equity and infrastructure funds in China and South Korea have been approached by Aramco through its advisors before a formal sale process kicks off in the next few weeks, they said.
The deal size may include $3.5 billion of equity and the remainder will be funded by bank debt, one source said, while another source said the transaction size could top $20 billion.
Saudi Arabia is the sixth largest gas market and report of Aramco, whose Master Gas System derives valuefrom a range of gas deposits and helps deliver it to consumers.
The gas deal is about the long-term view of gas consumption and use in Saudi Arabia, said one source familiar with deal, explaining why the gas deal could generate higher proceeds.
The source said many industries will shift to gas under the economic vision 2030, meaning domestic gas demand will increase.
Aramco is working with JPMorgan and Goldman Sachs on the deal in order to tap potential buyers, sources have said.
The companies tapped include the ones who took part in the stake sale process for Abu Dhabi National Oil Co's gas pipelines, which was purchased by a consortium of investors including Global Infrastructure Partners Brookfield, Singapore sovereign wealth fund GIC and European gas infrastructure owner and operator SNAM.
Brookfield and SNAM declined to comment. GIP did not respond to a request for comment immediately.
Other potential bidders showing interest in the Aramco sales process include China's Silk Road, South Korean state-backed investment fund CNIC Corp, South Korea’s sovereign wealth and construction funds Korean Investment Corp and NH Investment Securities, sources said.
Aramco, similar to Abu Dhabi National Oil Co, used a lease and lease-back agreement to sell a 69% stake of newly formed Aramco Oil Pipelines Company to the buyer and rights to 25 years of tariff payments for oil carried in its pipelines.