Saudi Aramco has secured one of the largest foreign direct investments in the Kingdom’s energy sector through an $11 billion lease-leaseback agreement with BlackRock’s Global Infrastructure Partners consortium, marking a transformative moment for the company’s ambitious gas expansion strategy.
Deal Structure and Partnership
This groundbreaking deal represents more than just financial engineering—it signals Aramco’s strategic pivot toward unlocking massive capital while maintaining operational control of its crown jewel Jafurah gas project. The transaction demonstrates how Gulf oil producers are innovating financial structures to diversify their economies while offering international investors stable, long-term revenue streams in the world’s most promising energy markets. This deal positions Aramco to accelerate development of what could become the biggest shale gas project outside the United States, fundamentally reshaping global natural gas dynamics.
Saudi Aramco signed an $11 billion lease and leaseback agreement involving its Jafurah gas processing facilities with a consortium led by Global Infrastructure Partners (GIP), part of BlackRock, it said on Thursday.
Under the deal, a newly formed subsidiary, Jafurah Midstream Gas Company (JMGC), will lease development and usage rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, and lease them back to Aramco for 20 years, the Saudi company added in a statement.
This is the latest in a series of financial arrangements, akin to borrowing, that allow Gulf oil-producing countries to raise money to diversify their economies while promising investors a stable revenue stream.
The $100 billion Jafurah project, potentially the biggest shale gas project outside the United States, is central to Aramco’s ambitions to become a major global player in natural gas and boost its gas production capacity by 60% by 2030 from 2021 levels.
Strategic Importance
Jafurah is estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate.
Aramco will hold a 51% majority stake in JMGC, with the remaining 49% held by investors led by GIP, Aramco said.
In July, two sources told Reuters the state oil company was close to securing around $10 billion from a BlackRock-led group to invest in Jafurah’s infrastructure.
The Jafurah deal represents a masterclass in financial innovation that allows Aramco to monetize its assets without sacrificing strategic control, creating a blueprint for how national oil companies can attract international capital while maintaining sovereignty over critical energy infrastructure. This transaction structure enables Aramco to unlock billions in immediate capital for reinvestment in other projects while guaranteeing BlackRock and its partners a steady 20-year revenue stream from one of the world’s most promising gas fields. The deal’s significance extends beyond its financial mechanics, as it demonstrates growing international confidence in Saudi Arabia’s energy transition strategy and the Kingdom’s commitment to becoming a global gas powerhouse.
Global Gas Market Impact
This landmark agreement positions Saudi Arabia to challenge established gas exporters like Qatar and the United States by leveraging the massive Jafurah reserves, which contain enough raw gas to supply global markets for decades while supporting the Kingdom’s domestic industrial expansion. The deal’s timing coincides with surging global demand for natural gas as countries seek cleaner alternatives to coal and oil, creating unprecedented opportunities for new suppliers to capture market share in Asia and Europe.
Aramco’s $11 billion Jafurah deal with the BlackRock consortium represents a watershed moment that combines financial innovation with strategic energy development, creating a new model for international energy partnerships. This transaction demonstrates how Gulf producers can unlock massive capital while maintaining control over critical infrastructure, setting a precedent for future energy megaproject financing.
The deal positions Saudi Arabia to become a dominant force in global gas markets while providing international investors with stable, long-term returns from one of the world’s most promising energy assets. The success of this partnership could reshape how energy companies approach large-scale project development, blending national strategic interests with international capital markets expertise.
GCN.com/Reuters