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BlackRock has signed an $11bn deal to lease and rent back natural gas processing facilities in Saudi Arabia, boosting state-owned energy company Saudi Aramco’s plans to attract more foreign capital to the kingdom.
Saudi Aramco on Thursday signed the 20-year deal to lease plants that process natural gas in the Jafurah basin to an investment group led by Global Infrastructure Partners, the private investment firm BlackRock acquired last year.
As part of the transaction, the consortium will lease the facilities back to Aramco. A new Aramco subsidiary, known as Jafurah Midstream Gas Company, will hold the assets, with the state-owned oil group owning 51 per cent of the division. GIP and its co-investors will own the remaining 49 per cent.
The deal is the latest signal that Saudi Arabia is gaining some traction in its efforts to attract overseas capital to support its economic ambitions.
Saudi Arabia reported $6.4bn in foreign direct investment inflows in the first quarter of this year, a 24 per cent increase from 2024, according to preliminary official data.
Yet the kingdom has struggled to attract foreign investment outside the energy sector as it seeks to diversify the economy away from dependence on oil revenues. Inbound FDI overall was down 19 per cent year on year to $20.7bn last year, the lowest since 2020.
Aramco’s chief executive Amin Nasser said: “This foreign direct investment into the kingdom also highlights the appeal of Aramco’s long-term strategy to the international investment community.”
Nasser earlier this month said the company was on track to start production in the Jafurah basin later this year. The project is expected to provide natural gas for energy needs in Saudi Arabia, allowing the kingdom to sell crude oil abroad that would otherwise be burned in the country to generate power.
The Jafurah basin holds one of the largest natural gas reserves in Saudi Arabia, estimated to hold about 229tn standard cubic feet of raw gas, according to Aramco.
The $11bn investment was expected to be staggered over time and would draw from GIP’s mid-market investment funds, which are led by Mark Florian. The mid-market strategy is part of the broader infrastructure platform led by Bayo Ogunlesi, Raj Rao and Michael McGhee, said a person briefed on the matter.
The deal is the latest between BlackRock and Saudi Arabia. In late 2021, the US company led a consortium that signed a $15.5bn lease and leaseback deal involving Aramco’s gas pipeline network. Nasser joined BlackRock’s board in July 2023.
