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Aramco Closes $12.4 Billion Infrastructure Deal with Global Investor Consortium

Aramco and a consortium of international investors announce the acquisition of a stake in Aramco Oil Pipelines Company (Asharq Al-Awsat)
Aramco and a consortium of international investors announce the acquisition of a stake in Aramco Oil Pipelines Company (Asharq Al-Awsat)
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Aramco Closes $12.4 Billion Infrastructure Deal with Global Investor Consortium

Aramco and a consortium of international investors announce the acquisition of a stake in Aramco Oil Pipelines Company (Asharq Al-Awsat)
Aramco and a consortium of international investors announce the acquisition of a stake in Aramco Oil Pipelines Company (Asharq Al-Awsat)

Aramco and an international investor consortium, including EIG and Mubadala, announced Friday the successful closing of the share sale and purchase agreement, in which the consortium has acquired a 49 percent stake in Aramco Oil Pipelines Company, a subsidiary of Aramco, for $12.4 billion.

The consortium consists of a broad cross-section of investors from North America, Asia, and the Middle East, Aramco said in a statement.

This long-term investment by the consortium underscores the compelling investment opportunity presented by Aramco’s globally significant pipeline assets, the company’s robust long-term outlook and the attractiveness of the Kingdom of Saudi Arabia to institutional investors, said the statement.

As part of the transaction, first announced in April 2021, Aramco Oil Pipelines Company and Aramco entered into a 25-year lease and leaseback agreement for Aramco’s stabilized crude oil pipelines network.

Aramco Oil Pipelines Company will receive a tariff payable by Aramco for stabilized crude oil flows, backed by minimum volume commitments.

Aramco continues to hold a 51 percent majority stake in Aramco Oil Pipelines Company and retains full ownership and operational control of its stabilized crude oil pipeline network.

The transaction does not impose any restrictions on Aramco’s actual crude oil production volumes, which are subject to production decisions made by the Kingdom.

“The interest we have received from investors shows strong confidence in our operations and the long-term outlook for our business,” said Aramco President & CEO Amin H Nasser.

“It is a significant milestone that reflects the value of our assets and paves the way forward for our portfolio optimization strategy. We plan to continue to explore opportunities to capitalize on our industry-leading capabilities and attract the right type of investment to Saudi Arabia.”

Aramco Senior Vice President of Corporate Development Abdulaziz Al Gudaimi, said: “The interest we received for this deal is evidence of continued confidence in our company from institutional investors and sets a new benchmark for infrastructure transactions globally.

“This transaction utilizes our world-class pipeline infrastructure to create additional value for our shareholders, reinforcing our company’s resilience and ability to adapt in a rapidly changing business environment.”

For his part, EIG’s Chairman & CEO Robert Blair Thomas said: “We believe this is the marquee infrastructure transaction globally and we are pleased to see that so many leading international investors agree with us.”

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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.