Investors Eye Aramco Oil Pipeline Bids

(Bloomberg) -- Brookfield Asset Management Inc. and KKR & Co. are among top infrastructure investors weighing bids for a stake in Saudi Aramco’s oil pipelines, people familiar with the matter said.

Apollo Global Management Inc. has also been studying whether to make an offer, the people said, asking not to be identified as the matter is private. The stake sale could fetch Aramco around $10 billion, the people said.

The world’s top oil producer has asked for expressions of interest and aims to receive non-binding offers next month, according to the people. The sale could also draw interest from Chinese investment funds, the people said. Some bidders may team up given the size of the transaction, the people said.

Aramco has been seeking to raise funds by selling stakes in non-core assets, mirroring a strategy adopted by Abu Dhabi National Oil Co. An investor group including Brookfield and GIC Pte invested $10.1 billion in Adnoc’s natural-gas pipelines last year.

While large Canadian pension funds often pursue such assets, some may shy away from the Aramco deal given political tensions between their government and Saudi Arabia, according to the people. Deliberations are at an early stage, and details of the potential transaction could change, the people said.

Representatives for Apollo, Aramco, Brookfield and KKR declined to comment.

Aramco is lining up a loan of about $7.5 billion that will be offered to potential investors in the oil pipelines, people familiar with the matter said last week. The oil producer is seeking new sources of capital to maintain annual dividend payments of $75 billion at a time of lower crude prices. Most of those payouts go to the Saudi state, which needs the money to fund its budget.

--With assistance from Matthew Martin, David Ramli, Jan-Henrik Förster, Aaron Kirchfeld, Vinicy Chan and Nicolas Parasie.

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