Aramco, one of the world’s leading integrated energy and chemicals companies, has signed an US$11 billion 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), a part of BlackRock.
As part of the transaction a newly-formed subsidiary, Jafurah Midstream Gas Co. (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 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. 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 centers, 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.”
The opportunity to invest in one of the region’s most significant natural gas developments garnered significant interest from investors worldwide. 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.`
GIP’s mid-market infrastructure equity team, which invests in diversified and contracted mid-market infrastructure assets and businesses around the world, has a robust, long-term track record of successful investments in the Middle East. This investment also 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.