Jafurah Midstream Gas Company has secured a major foreign direct investment, together with a lease and leaseback agreement for the development and usage rights of Aramco’s midstream assets at Jafurah. The transaction guarantees Aramco a receipt of $11 billion of upfront proceeds at completion, highlighting the potential of its continued capital investment program. This move is also part of the company’s broader drive to optimise its assets in response to increased demand for gas in the Kingdom of Saudi Arabia.
Aramco, recognised globally as one of the leading integrated energy and chemicals enterprises, has entered into an $11 billion lease and leaseback agreement involving its Jafurah gas processing facilities. The consortium behind the transaction is led by funds managed by Global Infrastructure Partners (GIP), which operates as part of BlackRock.
Jafurah is the largest non-associated gas project in Saudi Arabia, with an estimated 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate. As a key component of Aramco’s energy strategy, it holds the potential to increase gas production capacity by 60% by 2030 from 2021 levels to provide an adequate supply to address increasing demand.
Under the transaction, Jafurah Midstream Gas Company (JMGC) will lease the development and usage rights for both the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility. These assets will then be leased back to Aramco for a 20-year term. In terms of the deal, JMGC will receive a tariff payable by Aramco in return for giving the company rights to receive, process and treat raw gas from Jafurah.
Ownership of Jafurah Midstream Gas Company will be divided, with Aramco holding a 51% majority stake and the remaining 49% retained by investors led by GIP. The deal, which imposes no restrictions on Aramco’s production levels, is scheduled to close following customary approvals and completion conditions.
Amin H. Nasser, Aramco President & CEO, stated: “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.”
The Jafurah midstream deal attracted strong interest from global investors, reflecting the strategic importance of Jafurah as one of the most significant natural gas developments in the region. Co-investors include leading institutional investors from Asia and the Middle East. The transaction, once concluded, will further augment Aramco’s asset optimisation and enable further value to be captured from the Jafurah gas field.
GIP’s mid-market infrastructure equity team, which invests in diversified infrastructure assets around the world, has a long-term track record of successful investments in the Middle East. The Jafurah midstream deal further solidifies the consortium’s relationship with Aramco and BlackRock.