(Bloomberg) -- BlackRock Inc., Brookfield Asset Management Inc. and EIG are among firms that made final bids for a stake in Saudi Aramco’s natural-gas pipeline network that could fetch more than $15 billion, people familiar with the matter said.
Italian energy infrastructure operator Snam SpA, China’s state-backed Silk Road Fund Co. and Saudi government-controlled Hassana Investment Co. also made offers, the people said. Bidders are now discussing teaming up to form a consortium, the people said, asking not to be identified discussing confidential information.
State oil giant Aramco, the world’s biggest energy company, could inform suitors on the outcome of their bids as soon as this month, according to the people.
Representatives for Aramco and Snam declined to comment. Spokespeople for BlackRock, Brookfield, EIG, Hassana and Silk Road didn’t immediately respond to requests for comment.
While Western companies are increasingly focused on investments that support the transition away from fossil fuels, there’s still plenty of interest from them in Middle Eastern oil and gas assets and infrastructure.
BlackRock Inc. and KKR & Co. put $4 billion into Abu Dhabi’s oil pipelines in 2019. Larry Fink, BlackRock’s chief executive officer, said at a Saudi conference last month that climate goals would take time and that “environmentalists” were partly to blame for this year’s surge in energy prices.
Aramco’s Big Plans
Snam was part of a consortium that agreed last year to buy a $10.1 billion stake in Abu Dhabi National Oil Co.’s natural gas pipeline network. Europe’s biggest gas pipeline company teamed up with GIP, Brookfield, Singapore sovereign fund GIC Pte, Ontario Teachers’ Pension Plan and South Korea’s NH Investment & Securities Co. for the Adnoc transaction.
Aramco, the world’s largest oil company, is looking for new ways to raise cash to maintain a $75 billion dividend and complete huge investment plans. Over the coming decade, the Saudi firm is developing the multi-billion dollar Jafurah natural-gas field, expanding its oil-production capacity to 13 million barrels a day and investing in hydrogen production.
A deal involving the gas pipeline 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.
A group of investors led by Washington-based EIG agreed to invest $12.4 billion in Aramco’s oil pipelines in June, in one of the largest infrastructure transactions this year.