- With a price tag of a total $100 billion, the Jafurah development is described as the largest unconventional gas development outside the United States.
- Investors in Saudi Aramco’s Jafurah natural gas project have approached a group of lenders to secure $10.3 billion in funding for the project.
- According to Reuters, BlackRock, via Global Infrastructure Partners, is in talks with potential lenders interested in funding the project.
Investors in Saudi Aramco’s Jafurah natural gas project have approached a group of lenders to secure $10.3 billion in funding for the project. Jafurah is at the center of Saudi Arabia’s plans to develop its natural gas resources, diversifying from crude oil.
With a price tag of a total $100 billion, the Jafurah development is described as the largest unconventional gas development outside the United States. Its reserves are estimated at some 229 trillion cu ft of natural gas plus 75 billion barrels of condensate. Production has been scheduled to start in the current quarter.
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According to Reuters, BlackRock, via Global Infrastructure Partners, is in talks with potential lenders interested in funding the project. These include JP Morgan and Sumitomo Mitsui Banking Corporation, unnamed sources in the know told the publication. The source said BlackRock will contribute $1.8 billion of its own money to the total. According to Bloomberg, which also cited unnamed sources, the funding has already been secured.
Per the Bloomberg sources, the funding package consists of a seven-year loan that could be refinanced on the bond market and a 19-year loan facility. In addition to the abovementioned banks, the banks involved in the loans also include Citi, Mitsubishi UFJ, and Mizuho.
The news of the loan deal comes a month after Aramco sealed a deal with Blackrock’s Global Infrastructure Partners to invest $11 billion in a lease deal for Jafurah. Under the agreement, the BlackRock-led group will lease midstream facilities that serve Jafurah and then lease them back to Aramco for 20 years. The two set up a subsidiary company to manage the midstream facilities that BlackRock will lease, in which Aramco got 51% and BlackRock got 49%.
Earlier in the year, Aramco also announced the signing of a slew of contracts for the Phase 2 development of Jafurah. The contracts’ total value was $12.4 billion, to involve the construction of gas compression facilities and associated pipelines, expansion of the Jafurah Gas Plant—including the construction of gas processing trains—and utilities, sulfur, and export facilities.
Another $8.8 billion worth of contractual work was awarded to companies that will expand the project’s Master Gas System to boost its total capacity by an additional 3.15 billion standard cubic feet per day by 2028 through the installation of around 4,000 km (2,485 miles) of pipelines and 17 new gas compression trains.
The billions have been piling up as Aramco moves the project closer to commercial production. While not known for being stingy, Saudi Arabia has clearly made a priority of developing its natural gas reserves and not a moment too soon, either. Despite attempts by the climate change activist lobby to discourage natural gas use due to emissions—natural gas demand has been on a strong and steady rise. The latest driver of this demand, of course, is the artificial intelligence race between IT giants that everyone in forecasting expects will fuel a veritable surge in electricity demand.
Just this week, the Energy Information Administration reiterated its prediction that electricity consumption in the United States this year and next will hit a record high. America’s power use will hit 4,187 billion kilowatt-hours in 2025 and then rise to 4,305 billion kWh in 2026, according to the latest edition of the EIA’s Short-Term Energy Outlook. The previous record of 4,097 billion kWh was set in 2024.
Gas demand is rising globally, too, opening up a growing market to Aramco, which plans to ramp up the country’s natural gas production by as much as 60% by 2030 from 2021 levels, when gas production stood at 10.1 billion cu ft, according to Aramco.
By Irina Slav for Oilprice.com
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