RIYADH: Saudi Aramco signed an $11 billion lease-and-leaseback agreement with a consortium led by Global Infrastructure Partners, part of BlackRock, for midstream assets tied to its Jafurah gas development.
Under the deal, the newly formed Jafurah Midstream Gas Co. will lease development and usage rights for the Jafurah Field Gas Plant and Riyas NGL Fractionation Facility, then lease them back to Aramco for 20 years, according to a press release.
The company will collect a tariff from Aramco, which retains exclusive rights to receive, process and treat raw gas from the field.
The transaction secures one of the largest foreign direct investments in the Kingdom’s energy sector and 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 Co.
In a press statement, Amin H. Nasser, Aramco president and CEO, said: “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.”
He added: 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.”
As part of the deal, Aramco will own 51 percent of JMGC, while the GIP-led group will hold the remaining 49 percent. The transaction, free of production volume restrictions, is expected to close once customary conditions are met.
Jafurah, the Kingdom’s largest non-associated gas field, holds an estimated 229 trillion cubic feet of raw gas and 75 billion stock tank barrels of condensate. The field is central to Aramco’s plan to boost gas production capacity by 60 percent between 2021 and 2030 to meet rising demand.
Bayo Ogunlesi, GIP’s chairman and CEO, 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.”
The deal attracted significant interest from global investors, with co-investors from Asia and the Middle East participating. Aramco said the agreement will help optimize its asset portfolio and capture additional value from Jafurah’s development.
