Aramco signs US$11bn Jafurah deal with Blackrock-led investors

Aramco has signed a US$11bn lease and leaseback deal involving its Jafurah gas processing facilities with a consortium of international investors, led by funds managed by Global Infrastructure Partners (GIP), part of BlackRock

The Jafurah unconventional gas development is estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate, with production set to commence this year. It is set to play a key role in Aramco’s plans to increase gas production capacity by 60% between 2021 and 2030, to meet rising demand.

As part of 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 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. When completed, the transaction will support the optimisation of Aramco’s assets and capture additional value from the development of the Jafurah gas field.

Aramco will hold a 51% majority stake in JMGC, with the remaining 49% held by investors led by GIP. Co-investors in the transaction include leading institutional investors from Asia and the Middle East.

Amin H. Nasser, Aramco president & CEO, 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. 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.”

Bayo Ogunlesi, chairman and CEO of GIP, 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.”

This investment 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.