Aramco close to $10bn Jafurah infrastructure deal with BlackRock

Saudi Aramco is reported to be close to a deal that will raise around US$10 billion from a group led by BlackRock that will invest in the infrastructure of Aramco’s Jafurah gas project.

Reuters reported this after speaking with two people with knowledge of the matter, but requested anonymity.

The US$100 billion Jafurah project, which could become the largest shale gas project outside the United States upon completion, is central to Aramco’s future ambitions and is expected to increase its gas production capacity from 2021 levels by 60 per cent in 2030.

The two people said the latest transaction was expected to be similarly structured to two Aramco infrastructure deals in 2021, including one in which BlackRock invested in Aramco’s gas pipeline networks, allowing the Saudi company to generate funds. The Jafurah assets underpinning the deal include gas pipelines and a gas processing plant, one of the sources said.

In 2021, BlackRock and EIG were among investor groups that took stakes in companies that leased usage rights in Aramco’s gas and oil pipeline networks. The groups leased them back to Aramco for a 20-year period in two separate deals, helping the Saudi company to raise nearly US$28 billion.

Reuters reported that the agreement would be the latest in a series of financial arrangements, akin to borrowing, that enable Gulf oil-producing countries to raise funds for economic diversification while providing investors with a stable revenue stream.

Aramco has long been the biggest source of the kingdom’s revenues. Saudi Arabia has been seeking to diversify its economy as oil prices have come under pressure from global economic uncertainty that could further reduce demand.