Slaughter and May is advising Global Infrastructure Partners (“GIP”), a part of BlackRock, on its participation as lead investor in a global consortium to purchase an equity stake in Jafurah Midstream Gas Company (“JMGC”) for $11 billion as part of a lease and leaseback deal relating to the Jafurah gas processing facilities owned by the Saudi Arabian Oil Company (“Aramco”).
Jafurah is the largest non-associated gas development in the Kingdom of Saudi Arabia, estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate. It is a key component in Aramco’s plans to increase gas production capacity by 60% between 2021 and 2030, to meet rising demand.
As part of the transaction, a newly-formed subsidiary, 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 a period of 20 years. JMGC will receive a tariff payable by Aramco in exchange for granting Aramco the exclusive right to receive, process and treat raw gas from Jafurah. Aramco will hold a 51% majority stake in JMGC, with the remaining 49% held by a consortium of international investors led by funds managed by GIP.
The transaction is expected to close as soon as practicable, subject to customary closing conditions.