While dealmaking buzzed across the halls of the Future Investment Initiative, one transaction cut through the noise with the precision of a national strategy: Saudi Aramco’s $11 billion leaseback agreement for its Jafurah gas processing assets. This leaseback structure was chosen by Aramco to enhance capital efficiency, optimize its balance sheet, and share risks with global investors. By specifically targeting improvements in its weighted average cost of capital (WACC) and forecasted return on invested capital (ROIC), Aramco expects the transaction to reduce its WACC by 0.5% and increase its ROIC by 1.2%, signaling a more robust financial position. These strategic decisions underline Aramco’s intention to lead in capital structure innovation while maintaining strategic oversight of its essential assets.
Announced alongside the ninth edition of FII, the move is not just another financing milestone; it’s a statement of intent. In an era when the world’s energy majors are wrestling with capital constraints, Aramco is showing how Vision 2030 redefines scale, structure, and sovereignty in the energy economy.
The transaction, led by Global Infrastructure Partners (GIP), a unit of BlackRock, draws a powerful cross-section of global capital into Saudi infrastructure. Under the terms, a new Aramco subsidiary, Jafurah Midstream Gas Company (JMGC), will operate the assets through a 20-year leaseback. Aramco will retain a 51% stake, while the investor consortium, including Hassana Investment Company, The Arab Energy Fund (TAEF), and Aberdeen Investcorp Infrastructure Partners, holds the remaining 49%. The agreement is expected to deliver an annual return of approximately 7% to investors, in line with industry expectations for infrastructure assets. By comparison, recent LNG infrastructure deals in the U.S. and Qatar have often yielded slightly lower returns, typically ranging from 5% to 6%. This competitive edge highlights the geopolitical significance of capital flowing to Riyadh, as investors are drawn by the strategic location and scope of the Jafurah project. These figures underscore the deal’s attractiveness and highlight its strategic importance in securing competitive financial returns while ensuring long-term stability.
For Riyadh, the deal is both pragmatic and philosophical. It reflects a maturing capital market able to attract global investment without ceding control, and a willingness to apply sophisticated financing tools to national assets once seen as untouchable. This is the Vision 2030 model of modernization, not privatization, but partnership. However, it’s important to recognize potential risks associated with the transaction. Regulatory challenges, operational hurdles, and geopolitical tensions in the region may threaten the initiative’s success. By anticipating these risks, Saudi Arabia demonstrates a proactive approach to securing investor confidence and ensuring the robustness of its financial strategies.
The Jafurah field, estimated to contain 229 trillion cubic feet of gas, is one of the largest unconventional gas reserves in the world. Production is expected to begin in 2025, ramping up to 2 billion cubic feet per day by 2030. Beyond numbers, it positions Saudi Arabia as a future global gas powerhouse capable of balancing global markets and diversifying revenue at home. Compared with other global gas projects such as Yamal LNG in Russia, which targets an annual production of 16.5 million tons of LNG, and Australia’s Gorgon Project, with a total production capacity of 15.6 million tons per annum, Jafurah stands out for its significant scale and rapid timeline. This positions the field as a strong competitor in the global market, underlining Saudi Arabia’s strategic influence in future energy scenarios.
At FII9, amid panels on AI, energy transition, and economic resilience, Aramco’s move carried a deeper symbolism: it’s the Kingdom’s message to investors that the future is not waiting to be discovered; it is being designed, structured, and financed in Riyadh.
