Saudi Aramco said Thursday that it signed an $11 billion lease and leaseback deal involving its Jafurah natural-gas processing facilities with a consortium of international investors, led by funds managed by Global Infrastructure Partners (GIP), a part of BlackRock.
Jafurah is the largest non-associated gas development in Saudi Arabia, estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensate. It is a key component in Aramco's plans to increase gas production capacity by 60% between 2021 and 2030, to meet rising demand.
As part of the transaction, Jafurah Midstream Gas Company (JMGC) will lease development and usage rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, and lease them back to Aramco for a period of 20 years.
JMGC will receive a tariff payable by Aramco in exchange for granting Aramco the exclusive right to receive, process, and treat raw gas from Jafurah.
Aramco will hold a 51% majority stake in JMGC, with the remaining 49% held by investors led by GIP. The transaction, which will not impose any restrictions on Aramco's production volumes, is expected to close as soon as practicable, subject to customary closing conditions.
According to Aramco president and chief executive Amin Nasser, "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,” Nasser said.
“As Jafurah prepares to start phase one production this year, development of subsequent phases is well on track,” he stated. “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 centers, in the Kingdom."
GIP chairman and chief executive Adebayo Ogunlesi said that Thursday’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 opportunity to invest in one of the region's most significant natural-gas developments garnered significant interest from investors worldwide, Aramco said. Co-investors in the transaction include leading institutional investors from Asia and the Middle East. When completed, the transaction will support the optimization of Aramco's assets and capture additional value from the development of the Jafurah gas field.
GIP's mid-market infrastructure equity team, which invests in diversified and contracted mid-market infrastructure assets and businesses around the world, has a robust, long-term track record of successful investments in the Middle East.
The investment also builds upon the strong existing relationship between Aramco and BlackRock. In 2022, BlackRock co-led a consortium of investors in a separate minority investment in Aramco Gas Pipelines Company.
