Aramco Secures $11 Billion Jafurah Midstream Deal To Boost Gas Production Capacity

Aramco has entered into an $11 billion lease and leaseback agreement for its Jafurah natural-gas processing facilities. This deal involves a consortium of international investors, led by funds managed by Global Infrastructure Partners (GIP), part of BlackRock. Jafurah is the largest non-associated gas development in Saudi Arabia, with an estimated 229 trillion cubic feet of raw gas and 75 billion barrels of condensate.

The transaction involves the Jafurah Midstream Gas Company (JMGC) leasing development and usage rights for the Jafurah Field Gas Plant and Riyas NGL Fractionation Facility. These will be leased back to Aramco for 20 years. JMGC will receive a tariff from Aramco in exchange for exclusive rights to process raw gas from Jafurah. Aramco retains a 51% majority stake in JMGC, while GIP-led investors hold the remaining 49%.

Aramco's president and CEO, Amin Nasser, stated, "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."

The Jafurah project is crucial for Aramco's goal to boost gas production capacity by 60% from 2021 to 2030. This increase aims to meet growing demand. The transaction does not restrict Aramco's production volumes and is expected to close soon, pending customary conditions. Phase one production at Jafurah is set to begin this year, with further phases progressing well.

Adebayo Ogunlesi, GIP chairman and CEO, expressed satisfaction with their deepening partnership with Aramco through this investment in Saudi Arabia's natural-gas infrastructure. He noted that this move strengthens their relationship with Aramco while addressing global needs for cleaner fuels, energy security, and affordability.

Global Interest and Investor Participation

The opportunity attracted significant interest from global investors due to its importance in regional natural-gas development. Co-investors include leading institutional investors from Asia and the Middle East. The transaction will help optimize Aramco's assets and capture additional value from developing the Jafurah gas field.

This investment builds on BlackRock's existing relationship with Aramco. In 2022, BlackRock co-led a consortium investing in a minority stake in Aramco Gas Pipelines Company. GIP's mid-market infrastructure equity team has a successful track record of investments in diversified infrastructure assets worldwide.

Nasser added that Jafurah would play a major role as a feedstock provider for petrochemicals and supply energy needed for new growth sectors like AI data centers within Saudi Arabia.

With inputs from SPA