DMEA: Imports and gas deals

In this week’s DMEA, we look at Nigeria’s cost of product imports and Aramco’s plans to top its recent oil pipelines deal.

Reports emerged this week suggesting that Saudi Aramco is seeking to significantly improve upon the $12.4bn it achieved with its oil pipelines when it inks a similar deal focused on its network of gas conduits.

Sources close to proceedings were quoted by Reuters as saying that the company has a target of raising at least $17bn when it leases out a stake in the anticipated Aramco Gas Pipelines Co. (AGPC).

The firm is seeking to replicate the success achieved when it closed the April deal for a consortium led by EIG Global Partners to acquire a 49% stake in Aramco Oil Pipelines Co. (AOPC) for a duration of 25 years.

Under that deal, the Saudi firm will be liable for all maintenance and to make rate payments for crude transferred through the extensive pipeline network. The gas pipeline deal will be a “copy paste” of the oil network arrangement.

As it did for the AOPC deal, Reuters’ sources said that Aramco has – through advisors – approached potential bidders including state-backed Chinese and South Korean funds as well as North American private equity and infrastructure funds. The formal sale process is expected to begin in the next month.

Meanwhile, the Nigerian National Petroleum Corp. (NNPC) bought 145.9mn barrels of crude oil under the direct sales and direct purchase (DSDP) scheme for refining during the 12 months from March 2020.

In its latest report, the company said that all of the crude was processed and refined at overseas refineries and came in at a total cost of NGN2.4trillion ($5.83bn).

It said that in March 2021, 7.55mn barrels of crude were lifted from its daily allocation for domestic utilisation, “translating to an average volume of 243,650 [barrels per day (bpd)] in terms of performance”. The full amount was processed under the DSDP scheme.