BAHRAIN has sold a minority stake in a key oil pipeline that transports crude from Saudi Arabia to BlackRock as the Gulf’s smallest economy looks to monetise energy assets.
Bapco Energies, which manages the nation’s energy infrastructure including the pipeline, sold a minority ownership stake in the Saudi Bahrain Pipeline Company to a fund managed by BlackRock’s diversified infrastructure team, according to a statement, which did not include terms.
The pipeline can transport as much as 350,000 barrels of oil per day and connects Saudi oil processing facilities at Abqaiq with the Bapco refinery in Bahrain.
The deal is the first time Bapco has monetised some of its assets and is the latest sign of the government’s efforts to open up an industry that’s been closed to foreign investments for decades. The country’s energy industry is not on the same scale as other Gulf states, but officials are seeking to follow a strategy similar to neighbouring Saudi Arabia and the United Arab Emirates.
“We are implementing a range of projects and initiatives that support comprehensive national development and capitalising on our asset and operations management,” Mark Thomas, group chief executive officer of Bapco Energies, said in the statement.
Bapco and BlackRock also signed a memorandum of understanding to explore further investments in Bahrain’s infrastructure, according to the statement. The two will explore opportunities in areas including waste-to-energy and electric vehicle charging as well as carbon capture and sequestration.
The investment comes amid BlackRock’s aggressive push to grow its presence in Saudi Arabia, with executives privately highlighting the region as one of the firm’s top priorities. Earlier this year, the US$10.5 trillion asset manager said it was set to get as much as US$5 billion from Saudi Arabia’s sovereign wealth fund to invest in the Middle East and build a Riyadh-based investments team.
The investment “not only gives our investors exposure to a critical, contracted infrastructure asset,” Edward Winter, who leads BlackRock’s diversified infrastructure team across Europe, the Middle East and Africa, said. “It is also a testament to our position as a leading infrastructure investor in the Middle East.” BLOOMBERG
