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Investing.com -- BlackRock (NYSE:BLK) is exploring a potential sale of its stake in Saudi Aramco’s natural-gas pipeline leasing entity, Bloomberg reported on Thursday, citing people familiar with the matter.
The U.S. asset manager is in discussions with Aramco (TADAWUL:2222) about a possible buyback, though the talks are still preliminary and may not result in a deal, the report said. If no agreement is reached, BlackRock is expected to consider alternative options for the asset, per Bloomberg.
The stake dates back to 2021, when a consortium led by BlackRock invested $15.5 billion to acquire 49% of a company holding leasing rights over Aramco’s gas pipelines.
At the time, the deal was one of the largest infrastructure transactions in the region and was described by Aramco as a sign of its ability to attract major global investors.
The pipeline asset is believed to be worth billions of dollars. A potential repurchase would mark a reversal of the earlier strategy, suggesting Aramco sees renewed strategic value in boosting its ownership of critical energy infrastructure.
It would also mirror recent moves in neighboring Abu Dhabi, where sovereign wealth-backed firm Lunate bought out BlackRock and KKR’s 40% stake in ADNOC’s oil pipeline business. Earlier this year, Lunate also agreed to acquire Snam SpA’s minority interest in ADNOC’s gas pipeline unit.
For Aramco, any new transaction comes at a delicate moment. The company’s debt levels have climbed to their highest point in nearly three years. CEO Amin Nasser said in May that the firm plans to increase borrowing to finance growth and better utilize its balance sheet.
At the same time, Aramco is contending with weaker oil prices, partly due to major OPEC+ producers accelerating the rollback of supply cuts.
BlackRock, meanwhile, has continued to deepen its ties across the Middle East. It was the first global investment manager to establish an office in Riyadh and has active investments across Gulf markets, including in Kuwait, Qatar, and the United Arab Emirates.