As part of a consortium, the Trust will invest in this world-class infrastructure business, which is expected to generate long-term stable cash flows with potential for growth.

Keppel Infrastructure Fund Management Pte Ltd (KIFM), the Trustee-Manager of Keppel Infrastructure Trust (KIT), has entered into a subscription agreement, a limited partnership agreement and related documentation to invest in Aramco Gas Pipelines Company, an entity with cash flows derived from the gas pipelines network of Saudi Arabian Oil Company (Aramco). 

It is intended that KIT will invest US$250 million, alongside investors including BlackRock Real Assets and Hassana Investment Company (the investment arm of the General Organization for Social Insurance of the Kingdom of Saudi Arabia), for an indirect minority and non-controlling stake into a special purpose vehicle (SPV), which has entered into a conditional share sale and purchase agreement with Aramco. The SPV will acquire a 49% stake in Aramco Gas Pipelines Company, which will lease usage rights in Aramco’s gas pipeline network in Saudi Arabia for a 20-year period.  Concurrently, Aramco Gas Pipelines Company will grant back to Aramco the exclusive right to use, transport through, operate and maintain the gas pipeline network during the 20-year period in exchange for a quarterly volume-based tariff, which will be backed by minimum volume commitments. Aramco will retain the legal title to, and the sole operational control of, the pipeline assets. 

The acquisition is expected to provide long term, predictable cash flows to KIT through investing into a strong and growing business that is underpinned by one of the world’s largest reserves of natural gas. Driven by domestic consumption, gas demand in Saudi Arabia is expected to increase at a CAGR of 3.7% from 2021 to 2030^[1], primarily due to an increase in demand from the power generation and the refining and industrial sectors. Favorable governmental policies will also support the strong outlook for gas demand. 

Aramco, the counterparty for the lease and leaseback transaction, is one of the largest listed companies globally, with a market capitalisation of approximately US$2.0 trillion as at 7 February 2022. 

Mr. Jopy Chiang, CEO of the Trustee-Manager, said, “As the world pivots towards a more sustainable future, gas is expected to continue to play a key role in the global energy transition. The strategic addition of this gas pipeline business will allow KIT to diversify its income base geographically, as well as provide greater stability in the long term by replenishing the portfolio through the addition of another resilient business. 

“Given the strong fundamentals and the partnership with a top-tier counterparty with a world class operational record, the investment in Aramco Gas Pipelines Company is in line with the KIT’s strategy of acquiring and investing in good quality infrastructure businesses that generate long-term stable cash flows with potential for growth.” 

Following the completion of the acquisition (which is subject to satisfaction of certain customary closing conditions, including any required merger control and related approvals), KIT's total assets under management from S$4.5 billion as at 31 December 2021, to approximately S$4.6 billion. 

The KIT Trustee-Manager intends to fund the acquisition with internal sources of funds and existing debt facilities, including a two-year bridge facility taken up by KIT. 

Please refer to KIT’s SGXNET announcement for more details.

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^[1] _{Source: Aramco's 2020 Bond Prospectus (16 November 2020).}

About Keppel Infrastructure Trust  

Keppel Infrastructure Trust (KIT) is a diversified business trust listed on the Singapore Exchange with approximately S$4.5 billion in assets under management. Its goal is to deliver sustainable and growing returns to Unitholders, through a combination of recurring distributions and capital growth. 

KIT's portfolio of strategic infrastructure businesses and assets provide essential products and services to a wide array of customers including government agencies, multinational corporations, commercial and industrial enterprises as well as retail consumers. Its assets are segmented into the three core sectors of Distribution & Network, Energy and Waste & Water. 

Businesses and assets in the Distribution & Network segment provide essential products and services in the areas of gas production, manufacturing and distribution of essential chemicals, storage of petroleum products, as well as telecoms and electricity transmission. These businesses and assets are well-positioned to deliver resilient cash flows with potential for growth that is supported by favourable market dynamics and demand over the long term. 

The Energy and Waste & Water segments comprise assets that are integral to the provision of power, waste treatment and water purification. The contract terms for these assets are backed by recurring fixed capacity or availability payments, providing KIT with stable cash flows. 

The Trustee-Manager for KIT is Keppel Infrastructure Fund Management Pte. Ltd., a wholly-owned subsidiary of Keppel Capital Holdings Pte. Ltd., a premier asset manager with a diversified portfolio in real estate, infrastructure, data centres and alternative assets in key global markets. KIT is sponsored by Keppel Infrastructure Holdings Pte. Ltd., which invests in, owns and operates competitive energy and infrastructure solutions and services.

IMPORTANT NOTICE 

The value of Units and the income derived from them may fall as well as rise.  Units are not obligations of, deposits in, or guaranteed by, KIFM or any of its affiliates.  An investment in Units is subject to investment risks, including the possible loss of the principal amount invested.  Investors have no right to request KIFM to redeem their Units while the Units are listed.  It is intended that Unitholders may only deal in their Units through trading on the SGX-ST.  Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.  This announcement is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for Units.  The past performance of KIT is not necessarily indicative of the future performance of KIT.  This announcement may contain forward-looking statements that involve assumptions, risks and uncertainties.  Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions.  Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other developments or companies, shifts in expected levels of occupancy rate, property rental income, charge out collections, changes in operating expenses (including employee wages, benefits and training costs), governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business.  You are cautioned not to place undue reliance on these forward-looking statements, which are based on the KIFM’s current view on future events. None of Saudi Arabian Oil Company (Aramco), Aramco Gas Pipelines Company or any of their respective employees, agents or representatives shall have any liability whatsoever (in negligence or otherwise) for this announcement or any loss howsoever arising in connection with this announcement or any transactions described herein. This announcement has not been prepared by Aramco or any member of the Aramco group (including Aramco Gas Pipelines Company) and none of such entities have verified any information contained herein. Investors may not rely on Aramco or any member of the Aramco group (including Aramco Gas Pipelines Company) or any of their respective employees, agents or representatives in connection with this announcement or statements made in the related oral presentation of this announcement. Investors will have no recourse to Aramco, Aramco Gas Pipelines Company or any of their respective affiliates in respect of any transactions described herein.