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. Under the deal, a newly created company, Jafurah Midstream Gas Company (JMGC), will lease rights to the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, then lease them back to Aramco for 20 years.
Aramco will hold 51% of JMGC; the investor group will hold 49%. The Jafurah project is central to Aramco’s strategy to raise natural gas production by 60% by 2030 against 2021 levels.
The gas field is estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensate.
Aramco says the deal will allow it to unlock capital while maintaining operational control of the assets.
Analysts predict the deal reflects growing interest from foreign investors in Saudi energy infrastructure, especially amid efforts by Riyadh to diversify its economy and secure energy supply.
A group led by GIP is in talks with banks, including JPMorgan and Sumitomo Mitsui Banking Corporation, to raise around $10.3 billion in financing for the deal, split between short-term and long-term debt.
The $11B agreement was the biggest oil and gas M&A deal in August, according to S&P Global Market Intelligence, underlining the shift towards lease-and-leaseback structures among Gulf producers.
