Oil & Gas

Saudi Aramco has signed an $11 billion lease and leaseback agreement with a consortium led by Global Infrastructure Partners (GIP), part of BlackRock, involving its Jafurah gas processing facilities. Under the deal, a newly formed subsidiary—Jafurah Midstream Gas Company (JMGC)—will lease the development and usage rights for the Jafurah gas plant and the Riyas NGL fractionation facility, then lease them back to Aramco for 20 years. Aramco will retain a 51 percent majority stake in JMGC, while the remaining 49 percent will be held by investors led by GIP.

Jafurah is the largest non-associated gas development in Saudi Arabia, estimated to hold 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensate. It plays a central role in Aramco’s strategy to boost its gas production capacity by 60 percent between 2021 and 2030. With phase one of Jafurah’s development set to begin production this year, Aramco CEO Amin Nasser stated that subsequent phases are progressing as scheduled.

Nasser emphasized that Jafurah will provide key feedstock for the petrochemical sector and supply energy to power emerging industries such as artificial intelligence (AI) data centers within the kingdom. He also reaffirmed Aramco’s commitment to investing in its liquefied natural gas (LNG) projects despite lower revenues caused by weaker oil prices. The Jafurah site, considered the largest shale gas development in the Middle East, is expected to launch its first phase in Q4, followed by phase two soon after.

This is not the first time BlackRock has partnered with Aramco; in 2022, it co-led a consortium investing in Aramco’s gas pipeline business. Meanwhile, Aramco is reportedly planning to raise additional funds using revenues from five gas-fired power plants. The company remains majority-owned by the Saudi government (81.5%) and the Public Investment Fund (16%), with only 2.5% of shares held by minority investors. On Thursday, Aramco shares closed flat at SAR24.04 on the Saudi Exchange (Tadawul), down 12 percent year to date.