Keppel Infrastructure Trust invests in Aramco

KIT, together with two others, will invest $336.08m.

Keppel Infrastructure Trust (KIT), has entered into a subscription agreement, a limited partnership agreement, and related documentation to invest in Aramco Gas Pipelines Company, an entity with cash flows derived from the gas pipelines network of Saudi Arabian Oil Company.

KIT will invest $336.08m (US$250m), alongside investors BlackRock Real Assets and Hassana Investment Company, for an indirect minority and non-controlling stake into a special purpose vehicle (SPV). The SPV has entered into a conditional share sale and purchase agreement with Aramco and will acquire a 49% stake in Aramco, which will lease usage rights in its gas pipeline network in Saudi Arabia for 20 years.

According to Keppel Infrastructure Fund Management CEO Jopy Chiang, "The strategic addition of this gas pipeline business will allow KIT to diversify its income base geographically, as well as provide greater stability in the long term by replenishing the portfolio through the addition of another resilient business."

The acquisition is expected to provide long term, predictable cash flows to KIT through investing in a strong and growing business that is underpinned by one of the world’s largest reserves of natural gas. Driven by domestic consumption, gas demand in Saudi Arabia is expected to increase at a CAGR of 3.7% from 2021 to 2030, primarily due to an increase in demand from power generation and the refining and industrial sectors.

(US$1 = SG$1.34)