Aramco signed an USD 11 bn lease and leaseback agreement for its Jafurah gas processing facilities with a consortium led by BlackRock’s Global Infrastructure Partners (GIP), it said in a press release on Thursday.

The details: The agreement covers the Jafurah Field Gas Plant and the Riyas NGL Fractionation facility, which will be leased to a newly created subsidiary, Jafurah Midstream Gas Company (JMGC), and then leased back to Aramco for 20 years. Under the agreement, Aramco will pay a tariff to JMGC in return for exclusive rights to process and treat gas from Jafurah, with Aramco receiving USD 11 bn in upfront proceeds without limiting its production volumes.

Aramco will hold a 51% stake in JMGC, while the GIP-led consortium will own the remaining 49%. The transaction is expected to close “as soon as is practicable,” Aramco said, without providing further details on the expected timeline.

Background: News reports last month indicated that Aramco was nearing an agreement to raise some USD 10 bn from a BlackRock-led consortium to fund infrastructure for the project, replicating the structure of two 2021 transactions, where Aramco raised nearly USD 28 bn through two lease and leaseback agreements with investor groups including BlackRock and EIG.

IN CONTEXT- Aramco is heavily investing in standalone gas fields to supply power plants with cleaner-burning fuel, with the USD 100 bn Jafurah shale gas development being its flagship project — the largest unconventional gas initiative outside the US — estimated to hold a whopping 229 tn cubic feet (tcf) of gas. Initial production is expected by 3Q this year, slated to reach its full capacity of 2 bcf/d by around 2030. We have more details in our deep dive into the Liquid Fuel Displacement Program.

The story also got ink from Bloomberg, Reuters, and the Financial Times.

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