BlackRock-owned Global Infrastructure Partners (GIP) has agreed an $11bn (€9.42bn) lease-and-leaseback deal with Aramco involving the Jafurah gas processing facilities in Saudi Arabia.
Aramco, Saudi Arabian state-owned energy and chemical company, signed the multi-billion dollar agreement with a consortium of international investors, led by funds managed by GIP.
Jafurah is the largest non-associated gas development in Saudi Arabia, estimated to contain 229trn standard cubic feet of raw gas and 75bn stock tank barrels of condensate. Aramco said the facility is a key component in its 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.
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.
Amin H Nasser, Aramco president and 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. 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.”
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. 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.”
Aramco said co-investors in the transaction include leading institutional investors from Asia and the Middle East. When completed, the transaction will support the optimisation of Aramco’s assets and capture additional value from the development of the Jafurah gas field, the company added.
This latest 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.
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