Aramco seals US$11 billion Jafurah midstream deal with GIP-led consortium

Saudi Arabian Oil Company, Aramco, one of the world’s leading integrated energy and chemicals companies, has signed a 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.

Jafurah is the largest non-associated gas development in the Kingdom of Saudi Arabia, estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate. It is a key component in Aramco’s plans to increase gas production capacity by 60% between 2021 and 2030, to meet rising demand.

As part of the transaction 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 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.

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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.

The chance to invest in one of the region’s largest natural gas projects attracted strong global interest, with leading institutional investors from Asia and the Middle East joining the deal, which will help Aramco optimize its assets and capture more value from Jafurah’s development.

GIP’s mid-market infrastructure team, with a strong record of global and Middle East investments, expands its partnership with Aramco through this deal. The move follows BlackRock’s 2022 co-led minority investment in Aramco Gas Pipelines Company.