Saudi oil giant Aramco inks $11 billion deal on Jafurah project with a consortium led by BlackRock
Saudi Aramco Signs $11 Billion Deal for Jafurah Gas Processing Facilities
Saudi Aramco, the Saudi Arabian national petroleum and natural gas company, has announced a significant investment in the development of the Jafurah gasfield. The deal, worth $11 billion, is a lease-and-leaseback agreement for midstream gas-processing plants at the Jafurah field, and it is expected to be closed "as soon as practicable" subject to customary conditions.
The Jafurah field, located in the eastern part of Saudi Arabia, is the largest non-associated gasfield in the country. It is estimated to contain approximately 200 trillion standard cubic feet of gas in place, making it the largest liquid-rich shale gas play in the Middle East. The field is also estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensate.
The Jafurah project is progressing on schedule, with the first phase expected to be completed around 2025. The deal with a consortium led by BlackRock's Global Infrastructure Partners will help support this expansion. Under the agreement, a newly formed subsidiary called the Jafurah Midstream Gas Company (JMGC) will lease development and use rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility.
Aramco will hold a 51% stake in the newly formed JMGC subsidiary, with investors led by GIP holding the remaining 49%. Co-investors in the deal include some from the Middle East and Asia. The investment adds to the strong relationship between Aramco and BlackRock.
Bayo Ogunlesi, GIP chairman and chief executive, stated that the investment builds upon BlackRock and GIP's long-standing relationship with Aramco to serve growing market needs for cleaner fuels, energy security, and energy affordability. The deal is expected to capture more from the development of the Jafurah gasfield and support the optimization of Aramco's assets.
The Jafurah field plays a central role in Aramco's ambitions to increase gas production capacity by 60% between 2021 and 2030. The field is expected to produce around two billion standard cubic feet of gas per day by 2030. It is worth noting that Jafurah is an unconventional gasfield, requiring special equipment to access energy resources trapped inside layers of rock.
The investment aligns with Saudi Arabia's Vision 2030 goals, supporting energy transition and decarbonization targets. The Jafurah basin is a feedstock provider for the petrochemicals sector and is expected to supply energy for new growth sectors, such as AI data centers, in the kingdom.
In conclusion, the development of the Jafurah field and the associated international partnership form the cornerstone of Aramco's significant gas capacity increase planned over this decade. The $11 billion lease-and-leaseback agreement for the Jafurah gas processing facilities is a significant step towards achieving this goal.
- The $11 billion deal for the Jafurah gas processing facilities is a significant step in the development of the largest non-associated gasfield in Saudi Arabia, located in the Middle East.
- The JMGC subsidiary, formed with a 51% stake by Saudi Aramco and a 49% stake by investors led by GIP, will support the expansion of the Jafurah field, which is expected to produce around two billion standard cubic feet of gas per day by 2030.
- The investment in the Jafurah field aligns with Saudi Arabia's Vision 2030 goals, supporting energy transition and decarbonization targets, and is expected to supply energy for new growth sectors such as AI data centers in the kingdom.
- The Jafurah field, with its estimated 200 trillion standard cubic feet of gas in place, is the largest liquid-rich shale gas play in the Middle East and is expected to capture more value and support the optimization of Aramco's assets, reinforcing its position in the global energy business.
