Saudi Aramco has signed an $11 billion lease and leaseback agreement for its Jafurah gas processing facilities with a consortium led by Global Infrastructure Partners (GIP), part of BlackRock.
Major Gas Development with Long-Term Strategic Importance
The deal pertains to the Jafurah Field, the largest non-associated gas development in Saudi Arabia, containing an estimated 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate. The Jafurah development is critical to Aramco’s ambitious plans to increase gas production capacity by 60% between 2021 and 2030, meeting the rising demand for energy in the region.
New Subsidiary and Key Terms of the Agreement
Under the terms of the deal, Jafurah Midstream Gas Company (JMGC), a newly-formed subsidiary, will lease development and usage rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility. JMGC will lease these back to Aramco for 20 years, in exchange for a tariff. This agreement grants Aramco the exclusive right to receive, process, and treat raw gas from Jafurah.
Aramco will hold a 51% majority stake in JMGC, with the remaining 49% controlled by investors led by GIP. The transaction will not impose any restrictions on Aramco’s production volumes, and is expected to close subject to customary conditions.
