Saudi Lands $11B BlackRock Deal as Dubai Property Surges

Saudi Aramco has finalized an $11 billion lease and leaseback agreement for its Jafurah midstream gas assets with an international consortium led by Global Infrastructure Partners (GIP), part of BlackRock's investment funds. Announced on August 14 at Aramco’s Dhahran headquarters, the deal is a major step forward in Saudi Arabia’s strategic gas expansion plan.

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The agreement establishes a new subsidiary, Jafurah Midstream Gas Company (JMGC), which will lease the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility. JMGC will then lease these assets back to Aramco for 20 years. In return, JMGC will receive a tariff payment from Aramco, which retains full control over the processing and treatment of raw gas from the field. Ownership of JMGC is split with Aramco holding a majority 51% stake, while the remaining 49% belongs to the GIP-led consortium, which includes prominent institutional investors from Asia and the Middle East.

As the largest non-associated gas development in the nation, Jafurah is essential to Saudi Arabia's energy future. An estimated 75 billion stock tank barrels of condensate and 229 trillion standard cubic feet of raw gas may be stored in the gas field. This project is a key component of Aramco's plan to fulfil rising domestic demand by increasing overall gas production capacity by 60% between 2021 and 2030.

Amin H. Nasser, Aramco's President and CEO, emphasised the deal’s strategic value. He said that the Jafurah project is key to Aramco’s ambitious gas expansion program. The participation of the GIP-led consortium as investors highlights the project’s attractiveness and long-term value. Nasser also pointed out that Jafurah will serve as an important feedstock supplier for Saudi Arabia’s petrochemical sector and provide energy for emerging sectors such as artificial intelligence and data centres.

Bayo Ogunlesi, Chairman and CEO of GIP, noted that this investment builds on a prior partnership where BlackRock co-led a minority investment in Aramco Gas Pipelines Company in 2022. Ogunlesi highlighted that this collaboration supports shared goals to meet increasing demands for cleaner fuels, energy security, and affordability.

This $11 billion transaction strengthens Saudi Aramco's position in gas production while injecting significant foreign direct investment into the kingdom. It aligns with Saudi Arabia's Vision 2030 ambitions to diversify its energy resources and attract global investment in key infrastructure projects.

Conclusion

The $11 billion lease and leaseback deal for the Jafurah gas assets between Saudi Aramco and the BlackRock-led consortium solidifies a strategic partnership that is crucial to Saudi Arabia’s energy expansion plans. By combining local control with international investment, the project will support both domestic energy needs and emerging technologies, exemplifying the kingdom’s commitment to a diversified and sustainable energy future.