Kuwait city: Saudi Arabia's energy giant Aramco signed a USD 11 billion lease and leaseback deal with an international consortium led by Global Infrastructure Partners (GIP), part of BlackRock, to develop its Jafurah gas processing facilities. Jafurah is the largest non-associated gas development in Saudi Arabia, estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensates. This project is a crucial part of Aramco's strategy to increase gas production capacity by 60% between 2021 and 2030 to meet the rising demand.
According to Kuwait News Agency, 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 20 years. JMGC will receive a tariff from Aramco for granting the exclusive right to receive, process, and treat raw gas from Jafurah. Aramco will hold a 51 percent majority stake in JMGC, while investors led by GIP will hold the remaining 49 percent. The transaction is expected to close soon, subject to customary closing conditions, without imposing any restrictions on Aramco's production volumes.
Amin H. Nasser, Aramco President and CEO, stated that Jafurah is a cornerstone of their ambitious gas expansion program. He noted the GIP-led consortium's participation as investors in a key component of their unconventional gas operations, demonstrating the project's attractive value proposition. Nasser highlighted that this foreign direct investment into the Kingdom underscores the appeal of Aramco's long-term strategy to the international investment community. As Jafurah prepares for phase one production this year, development of subsequent phases is on track. The project is expected to play a significant role as a feedstock provider to the petrochemicals sector and in supplying energy for new growth sectors, such as AI data centers in the Kingdom.
Bayo Ogunlesi, Chairman and CEO of GIP, expressed pleasure in deepening their partnership with Aramco by investing in Saudi Arabia's natural gas infrastructure, a key pillar of global natural gas markets. He remarked that the opportunity to invest in one of the region's most significant natural gas developments had garnered significant interest from investors worldwide. Co-investors in the transaction include leading institutional investors from Asia and the Middle East. The transaction is anticipated to optimize Aramco's assets and capture additional value from the development of the Jafurah gas field. GIP's mid-market infrastructure equity team, with a successful investment track record in the Middle East, sees this investment as further strengthening the relationship between Aramco and BlackRock. In 2022, BlackRock co-led a consortium in a separate minority investment in Aramco Gas Pipelines Company.