Saudi Aramco has signed an $11bn lease and leaseback agreement for its Jafurah natural gas processing facilities with a consortium of global investors led by funds managed by Global Infrastructure Partners (GIP), part of BlackRock.
The deal involves Jafurah Midstream Gas Company (JMGC) leasing development and usage rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, and then leasing them back to Aramco for 20 years.
JMGC will receive a tariff from Aramco in exchange for exclusive rights to process and treat raw gas from Jafurah.
Saudi Aramco gas deal
Aramco will retain a 51 per cent majority stake in JMGC, while GIP and co-investors, including leading institutional investors from Asia and the Middle East, will hold the remaining 49 per cent.
The transaction, which places no restrictions on Aramco’s production volumes, is expected to close following customary conditions.
Jafurah, the largest non-associated gas development in Saudi Arabia, holds an estimated 229tn standard cubic feet of raw gas and 75bn stock tank barrels of condensate.
It is central to Aramco’s strategy to increase gas production capacity by 60 per cent between 2021 and 2030 to meet growing demand.
Aramco president and chief executive Amin Nasser, said: “Jafurah is a cornerstone of our ambitious gas expansion program, and the GIP-led consortium’s participation as investors in a key component of our unconventional gas operations demonstrates the attractive value proposition of the project.
“This foreign direct investment into the Kingdom also highlights the appeal of Aramco’s long-term strategy to the international investment community.
“As Jafurah prepares to start phase one production this year, development of subsequent phases is well on track”.
“We look forward to Jafurah playing a major role as a feedstock provider to the petrochemicals sector, and supplying energy required to power new growth sectors, such as AI data centres, in the Kingdom.”
GIP chairman and chief executive Adebayo Ogunlesi said: “We are pleased to deepen our partnership with Aramco with our investment in Saudi Arabia’s natural-gas infrastructure, a key pillar of global natural-gas markets.
“Today’s announcement builds upon BlackRock and GIP’s longstanding relationship with Aramco to serve growing market needs for cleaner fuels, energy security, and energy affordability.”
The transaction is expected to optimise Aramco’s assets, unlock additional value from the Jafurah field, and further deepen ties between Aramco and BlackRock.
In 2022, BlackRock co-led a consortium that invested in Aramco Gas Pipelines Company.
