Investment secured by Aramco for Jafurah is critical
21 August 2025
Commentary
Indrajit Sen
Oil & gas editor
In February 2020, Aramco received a capital expenditure grant of $110bn from Saudi Arabia’s government for the long-term phased development of the Jafurah unconventional gas resource base, located in the kingdom’s Eastern Province.
Aramco has recently sealed an $11bn lease-and-leaseback deal for gas processing facilities at its Jafurah reserve, with a consortium led by funds managed by Global Infrastructure Partners, part of US asset manager BlackRock.
The foreign investment into Aramco’s Jafurah programme is crucial for the Saudi energy giant to continue its expansion of facilities at the reserve and ramp up gas production to meet rising domestic demand and generate export revenues.
The Jafurah basin is the largest liquid-rich shale gas play in the Middle East, covering about 17,000 square kilometres. The reserve is estimated to contain 229 trillion cubic feet of gas and 75 billion stock-tank barrels of condensate.
Equally importantly, the cash injection will help Aramco to de-risk the economic profile of the long-term Jafurah unconventional gas development programme.
Aramco is estimated to have already made total capital expenditure of $25bn, with contract awards for engineering, procurement and construction (EPC) works on three phases of development.
Looking ahead, the Saudi Stock Exchange (Tadawul)-listed company is gearing up to award the main EPC contract on the fourth Jafurah expansion phase, while front-end engineering and design for a potential fifth phase is understood to be progressing.
Earlier in this decade, Aramco secured foreign investments into its oil pipeline network and gas transport pipeline infrastructure, with BlackRock also leading a consortium that invested in the gas transmission network.
The Jafurah investment agreement is believed to be the first time that Aramco, and Saudi Arabia, has leased an upstream energy asset to external investors. The deal, therefore, demonstrates Riyadh’s willingness to generate revenues from assets previously deemed out of bounds to foreigners, and illustrates Aramco’s strategy of moving past its sole-risk model and tapping into overseas capital to advance critical projects.
ALSO READ: Developer awards contracts for Jafurah cogeneration plant expansion
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