Saudi Aramco has signed an $11bn (SR41.25bn) lease and leaseback agreement for its Jafurah gas processing facilities with a consortium of international investors, spearheaded by funds managed by Global Infrastructure Partners (GIP), part of BlackRock.
This significant foreign direct investment (FDI) underscores the value creation potential of Aramco’s current capital investment programme.
The Jafurah gas development is the largest non-associated gas project in the kingdom of Saudi Arabia. It is estimated to hold 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensate.
This project is crucial to Aramco’s strategy of increasing gas production capacity by 60% between 2021 and 2030, aimed at addressing rising gas demand in the region.
Under the transaction, a newly formed subsidiary, Jafurah Midstream Gas Company (JMGC), will lease development and usage rights for the Jafurah field gas plant and the Riyas natural gas liquids fractionation facility.
JMGC will lease these assets back to Aramco for 20 years, receiving a tariff from Aramco in exchange for granting exclusive rights to receive, process and treat raw gas from Jafurah.
Aramco will maintain a 51% majority stake in JMGC, while the remaining 49% will be held by investors led by GIP.
Aramco president and CEO Amin H. Nasser said: “Jafurah is a cornerstone of our ambitious gas expansion programme, 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.”
The transaction, which will not place any limitations on Aramco’s production volumes, is expected to be finalised as soon as is feasible, pending standard closing conditions.
Upon completion, the deal will support the optimisation of Aramco’s assets and enhance value from the Jafurah gas field’s development.
This investment also strengthens the existing relationship between Aramco and BlackRock, which co-led a consortium of investors in a separate minority investment in Aramco Gas Pipelines Company in 2022.
GIP chairman and CEO Bayo 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 long-standing relationship with Aramco to serve growing market needs for cleaner fuels, energy security and energy affordability.”
In May, Aramco signed 34 memorandums of understanding and agreements with prominent US companies, with a potential total value of approximately $90bn.
