Aramco seals $11 billion lease deal for Saudi gas field with world's largest asset manager

Saudi Arabia's energy giant Aramco finalised an $11-billion lease-and-leaseback agreement on this week for its Jafurah gas processing plants with a group of global investors, led by funds managed by BlackRock, the world’s largest asset manager.

The Saudi state firm said in a statement that the project forms a key part of its plan to expand gas production by 60 per cent between 2021 and 2030, as reported by the Arab News publication.

As part of the arrangement, a new subsidiary, Jafurah Midstream Gas Company (JMGC), will hold rights to develop and operate both the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, leasing them back to Aramco for 20 years.

In return, Aramco will pay JMGC a tariff for exclusive rights to process and treat Jafurah’s raw gas in order to meet surging demand within Saudi Arabia.

Jafurah is the kingdom’s biggest non-associated gas field, holding an estimated 6.48 trillion cubic meters of raw gas and 75 billion stock tank barrels of condensate. For comparison, the recently discovered Sakarya gas field in the Black Sea is believed to hold gas reserves of 320 billion cubic metres, making it the largest in the Turkish Exclusive Economic Zone, while Azerbaijan has an estimated 2.5 trillion cubic metres of proven natural gas reserves, according to the International Energy Agency, citing BP.

Aramco will retain 51 per cent ownership of JMGC, while the consortium led by BlackRock’s Global Infrastructure Partners (GIP) will control the other 49 per cent.

The agreement imposes no restrictions on Aramco’s production capacity and will be finalised once routine closing conditions are met.

Aramco president and CEO Amin Nasser said the first phase of Jafurah output is expected to begin this year, with subsequent stages progressing on schedule. The field will provide feedstock for petrochemical industries and energy for emerging sectors, such as Artificial Intelligence (AI) data centers in Saudi Arabia.

Aramco noted that the transaction drew significant interest from investors worldwide, including co-investors from Asia.

By Nazrin Sadigova