Why sell a golden goose when you can just refinance the coop?
EIG Global Energy Partners has hired PJT Partners to structure a new “continuation fund” for its massive stake in Saudi Aramco’s oil pipeline network. The move allows EIG to roll over the asset—originally acquired in a $12.4 billion deal in 2021—keeping it on the books beyond the original fund’s expiry while offering liquidity to existing investors who want out.
🔄 THE MECHANICS:
- The Problem: The original investment vehicle is nearing its term limit (typically ~5 years). Standard PE logic dictates a sale.
- The Solution: A Continuation Fund. EIG moves the asset into a new vehicle, brings in fresh capital/investors, and allows the firm to manage the asset for a longer horizon.
- The Asset: A 49% stake in Aramco Oil Pipelines, operating under a 25-year lease that generates steady tariffs from crude volumes flowing across Saudi Arabia.
🌍 THE GULF INFRASTRUCTURE BOOM: This is part of a rapidly maturing secondary market for Middle East energy assets.
- BlackRock & KKR: Recently sold their ADNOC pipeline stake to Abu Dhabi’s Lunate.
- Kuwait Petroleum: Preparing a pipeline stake sale targeting $7 billion.
- Aramco: Also looking to offload gas-fired power plants for $4 billion.
💡 ANALYST TAKEAWAY: The “Continuation Fund” is fast becoming the preferred tool for Infrastructure GPs. When you hold a bond-like asset (25-year lease on Saudi oil flow) in a volatile world, you don’t want to auction it off just because a 5-year clock ran out. By rolling this over, EIG is betting that the yield on these pipelines is more valuable than a one-time exit multiple. It signals that global allocators are still hungry for long-duration, sovereign-backed energy cash flows.
👇 Infra Investors: Is the rise of continuation funds a win-win for liquidity, or does it prevent true price discovery by avoiding an open market sale?