BlackRock (NYSE:BLK) is reportedly in early-stage talks to divest its minority stake in a Saudi Arabian gas pipeline venture, potentially selling it back to Saudi Aramco, according to a Bloomberg report citing sources familiar with the matter.
The discussions, while ongoing, are said to be preliminary and may not result in a finalized transaction. Should negotiations stall, BlackRock may explore other avenues to offload the asset, the report noted.
The U.S.-based investment giant originally acquired the stake in 2021, leading a consortium that paid $15.5 billion for a 49% interest in a newly formed company that leases usage rights to Aramco’s gas pipeline infrastructure. The deal was one of the largest infrastructure investments ever executed in the Gulf region and was heralded by Aramco as a strong vote of confidence from global institutional investors.
The pipeline assets are reportedly valued in the billions, and a possible repurchase by Aramco would mark a notable reversal of strategy—indicating the energy firm sees renewed strategic importance in reclaiming a larger share of its energy transport network.
The move would mirror similar developments in the United Arab Emirates, where state-backed fund Lunate recently acquired a 40% stake in ADNOC’s oil pipeline business from BlackRock and KKR. Lunate also reached an agreement earlier this year to purchase Snam SpA’s minority holding in ADNOC’s gas pipeline unit.
For Aramco, a deal would come as the company balances increased leverage with strategic expansion. CEO Amin Nasser stated in May that the firm plans to take on more debt to fund growth and make fuller use of its balance sheet. Aramco’s debt has risen to its highest level in nearly three years.
At the same time, the company faces headwinds from a softening oil market, with OPEC+ members accelerating the reversal of prior production cuts.
BlackRock, for its part, has expanded its presence in the Middle East in recent years. It became the first major global asset manager to open an office in Riyadh and maintains active investments throughout the Gulf, including in Qatar, Kuwait, and the UAE.