Aramco to tap BlackRock-led consortium for Jafurah funding: Saudi Aramco is nearing an agreement to raise some USD 10 bn from a BlackRock-led consortium to fund infrastructure for its Jafurah gas project, Reuters reports, citing two sources it says are in the know. The USD 100 bn project is considered the largest shale gas development outside the US.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

The details: The assets in question include gas pipelines and a gas processing plant within the Jafurah project, one of the sources told the newswire. A timeline for a final agreement was not disclosed.

Same old structures: This transaction is expected to replicate 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. Investors took 49% stakes in Aramco’s pipeline subsidiaries, receiving tariffs from Aramco for pipeline usage, while Aramco retained 51% ownership and control of the assets.

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

REMEMBER- Earlier this month, Aramco was reportedly mulling the sale of up to five of its gas-fired power plants to raise funds, potentially generating some USD 4 bn. The prospective sale is part of a broader strategy by the oil giant to free up capital, boost net income, cut costs, and support dividend payments to the Kingdom. This divestment strategy may extend to other non-core assets, including housing compounds, pipelines, and port infrastructure.

Tags: