Saudi Aramco on Thursday signed an $11 billion lease and leaseback agreement for midstream gas-processing plants at its Jafurah field with a consortium led by BlackRock's Global Infrastructure Partners.
Under the transaction, a newly formed subsidiary called the Jafurah Midstream Gas Company will lease development and use rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, and then lease them back to Aramco for a 20-year period.
Aramco will hold a 51 per cent stake in the newly formed JMGC subsidiary, with investors led by GIP holding the remaining 49 per cent. The companies said the deal is expected to be closed “as soon as practicable”, subject to customary conditions.
Jafurah, the largest non-associated gasfield in Saudi Arabia, is a key player in Aramco's ambitions to increase gas production capacity by 60 per cent between 2021 and 2030. Jafurah is estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensate.
The company has said it anticipates total overall life cycle investment at the project to pass $100 billion.
“Jafurah is a cornerstone of our ambitious gas expansion programme, 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,” said Aramco chief executive Amin Nasser.
The Jafurah basin, with about 200 trillion standard cubic feet of gas in place, is the largest liquid-rich shale gas play in the Middle East. Jafurah is an unconventional gasfield, which means energy resources are trapped inside layers of rock that require special equipment to access.
“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 centres, in the kingdom,” Mr Nasser said.
Co-investors in the deal included some in the Middle East and Asia, the companies said. It is expected to capture more from the development of the Jafurah gasfield and support optimisation of Aramco's assets, they said.
The companies also said the investment adds to the strong relationship between Aramco and BlackRock.
“Today’s announcement builds upon BlackRock and GIP’s long-standing relationship with Aramco to serve growing market needs for cleaner fuels, energy security and energy affordability,” said Bayo Ogunlesi, GIP chairman and chief executive.
