A BlackRock Inc.-led group signed an $11 billion lease deal involving Saudi Aramco natural gas facilities as the state producer seeks to raise cash from infrastructure assets.
A group led by BlackRock’s Global Infrastructure Partners unit will lease infrastructure that serves the Jafurah gas project and lease them back to Aramco for 20 years, according to a statement. Aramco is developing the over $100 billion Jafurah project to supply fuel to domestic power plants as well as for export.
State-controlled Aramco has been seeking international capital by selling stakes in some assets. The company is a major source of revenue for the Saudi government’s economic transformation plan as it builds futuristic cities, and pushes into new sectors from artificial intelligence to tourism and sports in preparation for a future in which oil demand begins to wane.
A newly-formed subsidiary, Jafurah Midstream Gas Company, will be created as part of the deal. Aramco will hold a 51% majority stake in the venture, and the GIP-led group will own the rest. The transaction will not impose any restrictions on Aramco’s production volumes.
The latest deal ramps up BlackRock’s presence in Saudi Arabia as it builds up a portfolio in the Middle East. The firm was the first major global investment manager to open an office in Riyadh, and has invested across the Gulf in Kuwait, Qatar and the United Arab Emirates. Aramco’s Chief Executive Officer Amin Nasser has been on the board of the world’s biggest money manager since 2023.
BlackRock was also among investors that bought stakes in Aramco’s national gas pipeline network in 2021.
‘Unlock Capital’
Aramco’s Chief Financial Office Ziad Al-Murshed said on an Aug. 5 conference call that the company was reviewing its portfolio and could decide to spin off assets.
“What we’re looking at across the portfolio is to unlock capital that’s locked into relatively low-return, and invest in core” activities, he said. “When we look at assets, it is typically low-return that is tied up in things like infrastructure and where other investors would be interested.”
Bloomberg reported in 2021 that Aramco was considering introducing outside investors into parts of the Jafurah project. The company had approached infrastructure funds to gauge interest in midstream assets, people with knowledge of the matter said the next year.
Jafurah is an unconventional field, meaning the gas is trapped in hard-to-access rock formations and requires special techniques to extract.
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