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Aramco Nears $10 Bln Jafurah Infrastructure Investment

Arabian Post

18-07-2025

Business
Arabian Post

Aramco Nears $10 Bln Jafurah Infrastructure Investment

Arabian Post Staff -Dubai Saudi Aramco is in advanced discussions with a consortium spearheaded by BlackRock to secure approximately $10 billion for infrastructure linked to its expansive Jafurah gas initiative. The financing structure echoes prior deals, with investors purchasing usage rights while Aramco retains operational control and ownership. The proposed transaction centres on critical assets—specifically pipelines and a processing facility—essential to the $100 billion Jafurah project, the world's largest shale gas development outside the United States. Aramco aims to lift gas output by 60 per cent by 2030 from 2021 levels. ADVERTISEMENT This initiative represents another strategic approach by Gulf oil majors to diversify their revenue models amid volatile crude prices. The deal allows Aramco to tap private capital while offering investors stable tariff income backed by long‑term usage commitments. In 2021, BlackRock and EIG invested in Aramco's gas and oil pipeline subsidiaries through similar lease‑back transactions, collectively raising nearly $28 billion. Under those agreements, Aramco retained a 51 per cent stake in each entity and paid tariffs to investors for pipeline usage, a structure described by consultancy Qamar Energy as more akin to borrowing than a sale. With this new deal, Aramco continues its disciplined approach to infrastructure financing. The Jafurah project itself is a linchpin of Saudi Arabia's energy transition agenda, aligning with national objectives to bolster gas production and reduce reliance on oil exports. While those familiar with the talks confirm the structure mirrors the 2021 transactions, the group declined to specify a timeline for finalisation. Both Aramco and BlackRock declined to comment. Experts note that such arrangements enable Aramco to free up capital for diversification ventures while retaining strategic infrastructure oversight. 'The pipeline deals were basically a securitisation,' said Robin Mills, chief executive of Qamar Energy, referencing the 2021 transactions. Market analysts believe this deal could serve as a template for financing future segments of Jafurah, which is expected to reach production of 2 billion cubic feet per day by 2030. Taken together with Aramco's earlier asset sales—such as its consideration of offloading gas-fired power plants and port infrastructure—these moves reflect mounting government pressure to boost proceeds amid a fiscal deficit and fluctuating oil revenues. Saudi Arabia's reliance on oil revenues—which accounted for around 62 percent of state income in 2024—has prompted a series of asset realisations, bond issuances and structured financing to support large-scale domestic projects and broaden the economic base. The Jafurah deal also highlights growing investor appetite for stable, long‑dated infrastructure revenue streams in the Gulf. With institutional players like BlackRock involved, these deals are gaining traction as a viable alternative to traditional equity or debt-financing routes. Analysts suggest more such partnerships could emerge as the kingdom scales up energy-reform initiatives, including clean energy and non-oil sectors. As the deal progresses, stakeholders will monitor its structure, particularly in comparison with the 2021 models, and assess implications for Aramco's capital allocation strategy. The outcome could influence both market perception of the firm and broader investment flows into Middle East energy infrastructure.

More gas discoveries expected in Turkey after $30bn reserve find

The National

18-05-2025

Business
The National

More gas discoveries expected in Turkey after $30bn reserve find

More gas discoveries are expected in Turkey after the country announced a new reserve as Ankara looks to expand its domestic production, according to experts. Turkey on Saturday said a new gas reserve was discovered in the Black Sea with 75 billion cubic metres (bcm) of natural gas and an economic value of about $30 billion. It was found in the Goktepe-3 well at a depth of 3,500 metres. The reserve is expected to meet Turkey's home gas needs for three and a half years, President Recep Tayyip Erdogan said on Saturday. 'It is expected that further exploration efforts (both for conventional and unconventional gas) will result in additional discoveries and will help reducing Turkey's import dependency,' Sohbet Karbuz, director of natural resources and energy security at Paris based Mediterranean Association for Energy told The National. The phase-1 of the Sakarya field development is being completed, with production from 12 wells reaching almost 10 million cubic metres (mcm) a day. 'Phase-2 will bring the total production to 20 mcm per day next year. By 2028, the production from the field is expected to reach the plateau level of 40 mcm per day, which is equivalent to around 14 bcm per year,' he added. The latest find comes after the country revealed another field in the Black Sea with a gas reserve of 320 bcm in 2020. 'The new field is not as big as the Sakarya field which was discovered in 2020,' Robin Mills, chief executive of Qamar Energy told The National. 'It's reported as being at Goktepe, which was the name of the original wells in Sakarya, so it may be an additional discovery in the same field,' he said. The new discovery is expected to make a 'a useful contribution, especially as Turkey had almost no domestic production before Sakarya', Mr Mills said. Turkey, which imports more than 95 per cent of all the natural gas it needs, is pushing to reduce its reliance on external sources, Mr Karbuz said. It is seeking to boost supply security by developing domestic resources and expanding international partnerships in oil and gas exploration. Last year, Turkey consumed 53 bcm of gas, with its own production only accounting for about 2.3 bcm. It imports gas from Russia, Azerbaijan and Iran through pipelines. It also relies on liquefied natural gas from other countries. The new discovery 'enhances Turkey's energy security by providing a more stable and self-reliant energy supply, less susceptible to geopolitical tensions and market fluctuations', Rania Gule, senior market analyst at brokerage firm said. It is also 'likely to attract foreign direct investment and stimulate economic growth' as well as position 'Turkey as a potential energy hub in the region, facilitating the transit of gas from neighboring countries to European markets through key pipelines like the Trans-Anatolian Natural Gas Pipeline (TANAP)'. Turkey is also creating new partnerships with other countries to diversify its supply chain. Earlier this year, it signed an agreement with Turkmenistan to enable the flow of Turkmen natural gas to Turkey, Reuters reported, quoting Turkish Energy Minister Alparslan Bayraktar. It aims to buy up to 2 bcm of gas annually from Turkmenistan, with the gas expected to be transported through Iran's existing natural gas network. A separate project to build a gas pipeline across the Caspian Sea from Turkmenistan to Azerbaijan and further to Turkey is also being discussed as part of long-term co-operation between the countries. Demand for natural gas has been continuing to rise globally as countries seek to cut emissions and reduce global warming. Shell's 2025 LNG Outlook forecasts a 60 per cent increase in global demand for the fuel by 2040, driven by Asian economic growth, emissions reductions in industry and transport, and the rise of AI. The consumption of the fuel – considered a cleaner alternative to coal and crude oil – is expected to reach 630 million tonnes to 718 million tonnes a year by 2040, compared with 407 million tonnes last year, Shell said.