A BlackRock-led consortium is set to inject $10 billion into the vital pipeline infrastructure of Saudi Aramco's Jafurah gas project. This significant financial commitment highlights the central role of pipelines in expanding Saudi Arabia's natural gas production and its strategic shift towards a more diversified energy mix.
The investment is anticipated to mirror prior infrastructure deals from 2021, where BlackRock also participated in Aramco's gas pipeline assets. In those previous arrangements, investors acquired a 49% stake in new entities, such as Aramco Gas Pipelines Co., which then held 20-year leasing rights over existing pipeline networks. These entities lease the usage rights back to Aramco, ensuring a steady revenue stream for investors through tariffs on gas flows, underpinned by minimum volume guarantees. Aramco, however, maintains a controlling 51% stake and full operational command of these crucial assets.
The Jafurah project itself is a cornerstone of Aramco's plan to boost its gas production capacity by 60% from 2021 levels by 2030, representing a total investment projected to surpass $100 billion over the next 15 years. Crucially, this expansion necessitates the construction of extensive new infrastructure, including an estimated 1,500 kilometers (932 miles) of new pipelines, along with gas processing plants and other facilities. These pipelines are indispensable for transporting gas from the Jafurah field, which is expected to become one of the world's largest shale gas projects outside the United States.
This strong focus on natural gas infrastructure, particularly pipelines, underscores its perceived role as a "bridge fuel" in the global energy transition. By enabling increased natural gas utilization, Saudi Arabia aims to displace more carbon-intensive energy sources, thus contributing to its net-zero emission targets. The substantial investment from the BlackRock-led group signals confidence in the long-term stability and strategic importance of these pipeline assets within the evolving global energy landscape.