By: Oil & gas Middle east

Aramco, one of the leading energy and chemicals companies globally, has entered a notable $11 billion lease and leaseback agreement for its Jafurah gas processing facilities. This deal is in collaboration with a consortium of international investors spearheaded by Global Infrastructure Partners (GIP), a part of BlackRock.

The Jafurah project stands as Saudi Arabia’s largest non-associated gas development, boasting an estimated 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels. It plays a pivotal role in Aramco’s strategy to boost gas production capacity by 60% by 2030, aligning with increasing demand.

The transaction involves the creation of a subsidiary, Jafurah Midstream Gas Company (JMGC), which will lease development and usage rights for the Jafurah Field Gas Plant and Riyas NGL Fractionation Facility to Aramco over 20 years. In return, Aramco will pay a tariff to JMGC, securing the exclusive rights to receive, process, and treat Jafurah’s raw gas.

Aramco retains a 51% majority stake in JMGC, while investors led by GIP own the remaining 49%. The deal, which doesn’t restrict Aramco’s production volumes, is set to conclude once standard closing conditions are met.

Amin H. Nasser, Aramco President & CEO, emphasised Jafurah’s significance in their gas expansion program and highlighted the value proposition for international investors. With phase one production commencing this year, Jafurah is positioned to significantly contribute as a feedstock provider to the petrochemicals sector and support emerging growth sectors like AI data centres in Saudi Arabia.

Bayo Ogunlesi, Chairman and CEO of GIP, expressed enthusiasm about strengthening ties with Aramco and investing in Saudi Arabia’s natural gas infrastructure, underscoring the project’s importance in global natural gas markets.

This strategic investment opportunity has attracted significant interest from investors worldwide, including major institutional investors from Asia and the Middle East. It is expected to optimise Aramco’s assets and enhance the value derived from the Jafurah gas field development.

GIP’s mid-market infrastructure equity team, known for successful investments in the Middle East, reinforces its partnership with Aramco and BlackRock through this venture. In 2022, BlackRock co-led an investment in Aramco Gas Pipelines Company, demonstrating its ongoing collaboration.