Traffic drives construction underground
3 April 2025

On 14 February, Dubai construction was thrust again onto the global stage when Elon Musk, the world’s richest man, announced plans to explore the development of an underground Dubai Loop transportation system, along the lines of the Las Vegas Convention Centre Loop project in the US.
Dubai has typically made headlines globally by constructing the world’s tallest towers. As the city becomes increasingly congested on the surface, it is taking some of its largest construction projects underground.
With Musk’s backing, the Dubai Loop scheme is the most high-profile tunnelling project launched to date. It involves carving a futuristic transport system underneath Dubai. The initial phase of the project is currently being studied by Dubai’s Roads & Transport Authority (RTA) in partnership with The Boring Company, which is owned by Musk. It will cover 17 kilometres (km) and have 11 stations, with the capacity to transport over 20,000 passengers an hour.
The project highlights the importance of expanding underground infrastructure in the Middle East region. This is mostly necessitated by the pressure that rapidly growing cities have put on existing transport and utility networks, particularly in major urban centres such as Dubai, Riyadh and Doha.
Underground opportunities
Projects that involve tunnelling, such as metro rail systems, underground highways and pedestrian walkways, are deemed key enablers in reducing congestion and optimising land use.
The recently completed metro systems in Riyadh and Doha are examples of how underground rail networks can facilitate efficient urban mobility, and more such schemes are planned.
Without these subterranean projects, cities risk being stuck in a permanent state of gridlock, with longer commute times and decreased productivity. At the same time, tunnelling allows urban planners to integrate sustainable transport solutions, as well as large-scale utilities networks, without disturbing existing cityscapes, thereby enhancing connectivity and economic growth.
These developments signal a major shift in engineering priorities, with regional governments investing in underground transport, sewerage and metro extensions to accommodate their growing populations and infrastructure needs.
While the tower crane-dotted skylines of urban centres in the GCC attract attention, delivering major projects underground is an equally impressive engineering feat. Tunnelling under busy cities requires advanced excavation techniques, careful planning and coordination to avoid disruptions.
More tunnelling work is expected as Dubai takes another significant step forward in tackling its ongoing traffic problems [with] a new metro link
UAE tunnelling projects
Tunnelling work forms a significant portion of the Dubai Metro Blue Line extension. Awarded in December for AED20.5bn ($5.5bn), the project includes 15.5km of underground track and five subterranean stations. When operational in 2029, the Blue Line will significantly expand Dubai’s metro capacity, linking major residential and commercial hubs.
More tunnelling work is expected as Dubai takes another significant step forward in tackling its ongoing traffic problems by starting the procurement process for its next metro link: the Gold Line.
Although the technical details of the project have yet to be revealed, it is expected that tunnels will form a major component of the scheme given that the new line will run through busy urban areas where there is little space to build overground.
The Gold Line will start at Al-Ghubaiba in Bur Dubai. It will run parallel to – and alleviate pressure on – the existing Red Line, before heading inland to Business Bay, Meydan, Global Village and residential developments in Dubailand.
As a first step, the RTA has sent a request for proposals to companies for the lead consultancy role on the multibillion-dollar project.
The UAE’s Etihad Rail also began a study of the tunnels required for the high-speed railway line connecting Abu Dhabi and Dubai in January. The survey works are ongoing on the Jaddaf and Dusup tunnels that will serve the high-speed rail link. Initial plans for the project include tunnelling works totalling 31km.
Another major tunnelling project in the UAE is the $22bn Dubai Strategic Sewerage Tunnels scheme. The client, Dubai Municipality, is preparing to tender its first packages, which include deep tunnels that will stretch 42km in Jebel Ali and 16km in Warsan.
The project will be delivered under a public-private partnership model, with international consortiums competing for contracts. Once completed, these tunnels will replace the traditional wastewater network, reducing energy consumption and enhancing long-term sustainability.
Saudi schemes
In Saudi Arabia, Riyadh is preparing to expand its metro network with the addition of a Line 7 and an extension to the existing Line 2.
The total length of Line 7 will be about 65km, of which 47km will be underground. The line will have 19 stations, 14 of which will be underground.
The project involves constructing a metro line linking the Qiddiya entertainment city development, King Abdullah International Gardens, King Salman Park, Misk City and Diriyah Gate.
In March, the Royal Commission for Riyadh City (RCRC) gave consortiums until 15 June to submit their bids for a design-and-build contract for the construction of Line 7.
The planned Line 2 extension is 8.4km long, of which 7.1km is underground, and three out of its five stations will be built underground. The RCRC is expected to award the construction contract this year.
In January, the kingdom also completed the phased roll-out of the Riyadh Metro network. The current network comprises six lines spanning about 176km, of which 74km is constructed underground.
These numbers indicate that over 42% of the overall network is underground, highlighting the growing importance of tunnels in the kingdom’s plans to improve infrastructure in its most densely populated cities.
Tunnelling works are also a key component of the plans to improve the stormwater drainage system in Jeddah, where the municipality is preparing for the construction of the King Abdullah Road-Falasteen Road tunnel.
The three-year scheme involves constructing 5.3km of tunnels with an internal diameter of 7.2 metres using tunnel boring machines (TBMs) and another 3.4km of tunnels with a diameter of 3.5 metres driven by pipe jacking or TBMs.
At the kingdom’s Neom gigaproject, city planners are looking to find solutions to many of the problems faced in existing cities and, as a result, tunnels and large-scale underground utilities corridors are being built at the beginning of the project. For example, the development’s Delta Junction tunnels will serve as a railway junction connecting the Spine infrastructure corridor with the Neom Connector rail link to the Oxagon industrial zone.
The project involves 26.5km of tunnelling work that will be split into a north and a south lot. The construction works are expected to begin this year as the client is evaluating the revised proposals submitted by firms in November last year.
Kuwait Metro will feature extensive tunnelling … ensuring minimal disruption to existing roads while integrating with future transport networks
Further tunnel projects
Beyond the Gulf, Egypt has a long history of tunnelling projects, as it has had to deal with crippling congestion and urban overcrowding for decades. In the 1980s, work was completed on two major projects that involved tunnelling: the first phase of the Cairo Metro system and the Greater Cairo wastewater project, which involved the construction of sewage tunnels on the east and west banks of the Nile.
Today, Cairo’s tunnelling projects include the Cairo Metro Line 4 project. Spanning 42km with 39 stations, it involves over 20km of tunnels.
Meanwhile, in Morocco, national railway operator L’Office National des Chemins de Fer (ONCF) is constructing a tunnel project in Rabat.
In February, ONCF announced a 3.3km tunnel to be constructed under the Bou Regreg river at an estimated cost of MD1.4bn ($140m). The tunnel will connect the Sale and Agdal stations in an effort to alleviate traffic.
Similarly, the long-awaited Kuwait Metro will feature extensive tunnelling to navigate the dense urban fabric of Kuwait City, ensuring minimal disruption to existing roads while integrating with future transport networks.
Qatar’s expansion of Doha Metro, meanwhile, requires additional underground infrastructure to connect developing areas and support the country’s vision for a comprehensive public transport system.
Mecca Metro, already serving millions of pilgrims, is also set for further expansion, likely involving significant tunnelling to facilitate smoother access to holy sites while overcoming geographic constraints.
In Oman, the Muscat Metro project is likewise expected to link key districts while preserving the city’s landscape and avoiding disruptions to arterial roads by introducing underground sections.
All of these projects show that tunnels will play an important role in the region’s future as it strives to create cities with more efficient and environmentally sustainable transit and utilities systems.
Exclusive from Meed
-
Oman invites bids for Musandam renewables study25 August 2026
-
US launches sanctions campaign against Iran25 August 2026
-
Kuwait tenders $3.3bn gas processing facility25 August 2026
-
Iraq-GCC grid link delayed amid security concerns25 August 2026
-
L&T announces Jafurah fourth expansion phase contract award24 August 2026
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Oman invites bids for Musandam renewables study25 August 2026
Oman’s Nama Power & Water Procurement Company (PWP) has issued a request for proposals (RFP) for techno-economic consultancy services to assess the feasibility of renewable energy options in Musandam Governorate.
The study will examine solar photovoltaic (PV), wind and hybrid renewable energy configurations. It will also assess battery energy storage systems (bess) and other renewable energy and energy storage technologies.
The consultant will be required to determine which technologies are technically and economically justified for the governorate.
The bid submission deadline is 24 September.
The Musandam power system is served primarily by the 123MW Musandam independent power plant (IPP), which began operating in 2017. The governorate has historically relied on small diesel-fired units, but has been seeking to move away from diesel-fired power generation for several years.
Nama PWP has previously said it was exploring renewable energy options in Musandam to meet future additional capacity requirements.
Its latest seven-year statement, released in March, forecasts peak electricity demand in Musandam to rise from 91MW in 2024 to 130MW in 2031, an average annual increase of 5%. Average demand is forecast to rise from 52MW to 73MW over the same period.
The plan says demand growth is being driven by distribution-level load and projects aimed at boosting tourism, economic and commercial activity.
Separately, the utility recently invited bids for financial and commercial consultancy services covering three 1GW solar IPPs targeted for commercial operation by the second quarter of 2030.
The bid submissions deadline is 10 September.
The three projects covered by the financial and commercial consultancy tender are understood to also be part of the 4GW programme, for which a technical advisory tender was issued on 15 July.
Bidding for this tender closes on 26 August.
READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDFSaudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.
Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:
> WORLD CUP: What the 2026 World Cup means for Saudi Arabia 2034> MARKET FOCUS: Maghreb fortunes diverge> INDUSTRY REPORT: GCC banks prove resilient amid turmoil> LEADERSHIP: Private capital and the GCC infrastructure inflection> INTERVIEW: Developers look beyond standalone solarTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/18983679/main.jpg -
US launches sanctions campaign against Iran25 August 2026
The US has launched a sweeping sanctions campaign against Iran and the entities that trade with it, imposing measures on almost 60 individuals, companies and vessels while expanding the reach of secondary sanctions across five sectors of the Iranian economy.
The campaign, named Operation Economic Outcast, was announced on 24 August by US treasury secretary Scott Bessent, who described it as an economic D-Day for Iran. He said Washington’s objective was to sever every economic lifeline sustaining the Iranian regime.
The treasury’s Office of Foreign Assets Control (Ofac) issued five sectoral sanctions determinations under Executive Order 13902, covering digital assets, technology, gold, aviation and shipping. The determinations allow Ofac to sanction any person operating in those sectors, regardless of location. Washington said Iran uses cryptocurrency for sanctions evasion, seeks advanced technology for its weapons programmes, uses gold to stabilise the rial, and relies on commercial aviation and shipping networks to move fighters, weapons and oil revenue.
The measures build on earlier determinations targeting Iran’s financial, petroleum and petrochemical sectors.
Ofac also sanctioned close to 60 entities, individuals and vessels across multiple jurisdictions, including UAE-based entities, over alleged involvement in nuclear and missile procurement, cyber operations and oil revenue networks. The designations named a network of brokers, companies and shadow fleet vessels operating across the UAE, Hong Kong, China, Singapore, Switzerland and other regions to transport Iranian oil and channel revenue to the Islamic Revolutionary Guard Corps.
Among those designated were shipping brokers and bunkering firms based in the UAE that Washington said facilitated Iranian oil shipments and provided services to sanctioned vessels. The treasury also identified several shadow fleet tankers as blocked property, saying they had moved millions of barrels of Iranian crude and petroleum products, mainly to China.
Separately, the treasury targeted a procurement network spanning the Middle East and East Asia that it said supported Iran’s acquisition of proliferation-sensitive equipment, along with a cyber group directed by Iran’s Ministry of Intelligence & Security.
Bessent said Washington was pressing governments to shut down Iran-related activity within defined timelines, warning that entities facilitating money laundering or sanctions evasion for Iran risked being cut off from the US financial system. He declined to name specific countries.
The campaign follows the UAE’s own move against Tehran. On 19 August, the UAE suspended all trade, commercial exchanges and financial transactions with Iran with immediate effect, citing regional escalation. The UAE has historically been one of Iran’s most significant trading partners, with much of the relationship built on re-export trade routed through Dubai.
https://image.digitalinsightresearch.in/uploads/NewsArticle/18983152/main.jpg -
Kuwait tenders $3.3bn gas processing facility25 August 2026

State-owned Kuwait Gulf Oil Company (KGOC) has issued the tender for the development of an onshore gas plant next to the Al-Zour refinery, according to industry sources.
The project budget is estimated at $3.3bn, and the bid deadline is 29 December, with a meeting for contractors scheduled for 14 September.
The tender was issued on 23 August.
The proposed plant will have the capacity to process up to 632 million cubic feet a day of gas and 88.9 million barrels a day of condensates from the Dorra offshore field, located in Gulf waters in the Saudi-Kuwait Neutral Zone.
In February, MEED reported that at least seven companies had shown interest in participating in the tender.
Contractors that sent representatives to previous meetings to discuss the project include:
- Samsung E&A (South Korea)
- Larsen & Toubro (India)
- Tecnicas Reunidas (Spain)
- Saipem (Italy)
- Hyundai Engineering & Construction (South Korea)
- Hyundai Engineering Company (South Korea)
- JGC (Japan)
The tender process is using a fast-track model, which means that Kuwait’s Central Agency for Public Tenders (Capt) will not be involved in the tender process.
Capt typically reviews the technical and commercial evaluations of bids and verifies that the bidding process is competitive.
It is understood that not requiring Capt to approve this tender is expected to speed up the tender process.
Iran disputes ownership of the field, referring to it as Arash.
Iran claims the field partially extends into Iranian territory and asserts that Tehran should be a stakeholder in its development.
The Dorra field’s close proximity to Iran could make development difficult due to current security concerns.
The offshore elements of the wider Dorra field development project are expected to be especially difficult to protect from attacks from Iran.
Earlier this month, MEED revealed that Al-Khafji Joint Operations (KJO) had selected contractors for two major offshore packages under the Dorra field facilities development project.
KJO, which is jointly owned by Aramco subsidiary Aramco Gulf Operations Company and Kuwait Petroleum Corporation subsidiary KGOC, has divided the engineering, procurement and construction (EPC) scope for the Dorra gas production project into four packages: three offshore and one onshore.
US-based McDermott International has secured offshore package 2A, valued at about $1.5bn, according to sources.
A consortium of India’s Larsen & Toubro Energy Hydrocarbon (LTEH) and Italian contractor Saipem has secured package 2B, sources told MEED.
Estimated at about $3.7bn, package 2B is the largest of the three offshore EPC packages under the Dorra field facilities project.
MEED reported in March that the LTEH/Saipem consortium had emerged as the lowest bidder for offshore package 2B.
Contractors submitted bids for offshore packages 2A and 2B by the 9 March deadline, MEED previously reported. Bid validity was understood to expire on 15 August, prompting KJO to issue letters of intent to the selected contractors earlier this month, sources said.
https://image.digitalinsightresearch.in/uploads/NewsArticle/18964461/main.png -
Iraq-GCC grid link delayed amid security concerns25 August 2026
Iraq has postponed the planned commissioning of its 500MW electricity interconnection with Kuwait despite completing about 96% of the project.
According to local media reports, Iraq Electricity Ministry spokesman Ahmed Turki said: “The announcement of the completion of the electricity interconnection project with Kuwait has been postponed due to the security situation and the current events in the region.”
The project had been scheduled to be completed and commissioned in September, connecting Iraq to the six-member Gulf Cooperation Council (GCC) electricity network.
The GCC-Iraq grid link involves a double-circuit 400-kilovolt (kV) transmission line from the Wafra station in Kuwait to the Al-Faw station in south Iraq, with a total transmission capacity of 1,800MW and a length of 295 kilometres.
As MEED previously reported, construction on the project began in June 2023, with an initial completion period of 24 months.
Earlier that year, the GCC Interconnection Authority (GCCIA) awarded contracts to the following contractors: KEC International (local), Kalpataru Power Transmission (India), Calik Enerji (Turkiye), Cegelec Saudi Arabia (local/France) and National Contracting Company (NCC).
In January 2020, Iraq signed a memorandum of understanding to import 500MW of electricity from the GCCIA.
The project was initially due to begin operating in April this year. However, in May, Iraq Electricity Ministry spokesman Ahmed Mousain said the interconnection line had reached an area in Kuwait where Kuwaiti forces were deployed because of the US-Iran war, with the security situation disrupting the project’s final stages.
Iraq currently produces about 28GW of electricity, according to the Electricity Ministry, but demand during peak summer periods is estimated at more than 50GW. The shortfall continues to cause widespread outages and put pressure on the national grid.
In parallel, Iraq’s power sector is undergoing one of its largest expansion programmes in decades as the government attempts to address chronic electricity shortages, diversify fuel sources and strengthen regional grid connectivity. As of May, over $40bn-worth of projects were under execution, following $4.2bn in new contracts last year.
https://image.digitalinsightresearch.in/uploads/NewsArticle/18963936/main.jpg -
L&T announces Jafurah fourth expansion phase contract award24 August 2026

Indian contracting conglomerate Larsen & Toubro (L&T) has announced that its subsidiary, L&T Energy Hydrocarbon Onshore (LTEH Onshore), has won a contract to undertake a gas compression facilities project “for a prestigious client in the Middle East”.
LTEH Onshore received the letter of award during India’s 2026 financial year, which starts on 1 April, Mumbai-headquartered L&T said in a statement, describing the order as ‘ultra-mega’ – a term the company uses for contracts valued at more than INR150bn ($1.57bn).
The project involves the engineering, procurement and construction (EPC) of gas compression plants, comprising gas inlet facilities, gas compression systems, condensate and produced-water handling systems, propane refrigeration systems and all associated utilities, L&T said in its statement on 24 August.
“The facilities will be developed for new onshore installations to process sour gas in compliance with applicable client standards, codes and project requirements,” the Bombay Stock Exchange-listed company said.
To meet the power requirements of the gas compression plants, L&T’s Power Transmission & Distribution business will execute two 230kV extra-high-voltage substations, L&T added.
MEED understands that the contract award relates to the fourth expansion phase of the Jafurah unconventional gas development in Saudi Arabia, for which Saudi Aramco selected LTEH for EPC works earlier this year.
MEED previously reported that LTEH started work on the Jafurah fourth expansion phase during the second quarter of the year, with sources estimating the contract value at around $1.5bn.
The main scope of work on the Jafurah fourth expansion phase project involves the EPC of two gas compression trains at the giant gas basin in the kingdom’s Eastern Province. Each plant will be able to process up to 200 million cubic feet a day (cf/d).
The detailed scope of work involves the EPC of the following process and utilities units at the south field of the Jafurah reserve:
- Two gas compression trains of 200 million cf/d capacity each, measuring 400 metres by 400 metres
- Gas compression plant inlet area
- Gas compression plant condensate and produced-water handling
- Instrumentation and plant air unit
- Nitrogen generation unit
- Raw/potable/water utilities
- Chemical injection systems
- Diesel systems
- Flare and flare gas recovery systems
- Gas compression plant burn pit
- Closed drain system
- Oily water system
- Sanitary water system
- Stormwater system
- Firewater system
- Fire and gas protection system
- All buildings located within the gas compression plant, excluding security buildings
- Outside battery limit buildings
Contractors submitted proposals for the Jafurah fourth expansion phase project by the deadline of 15 January 2025, MEED previously reported. After the bids were submitted, Aramco initially asked contractors to extend their bid validity until the end of September, as it needed more time to evaluate the proposals.
The Saudi energy giant then asked contractors to extend the validity of their base proposals until February this year, and the bidders complied, MEED reported.
Along with requesting a second bid-validity extension, Aramco also sought an alternative set of commercial proposals from contractors, sources said. Bidders submitted the second price option to the client in December, the sources added.
The following contractors are among those that are understood to have submitted bids for the Jafurah fourth expansion phase project:
- China Petroleum Engineering & Construction
- Larsen & Toubro Energy Hydrocarbon (India)
- Samsung E&A (South Korea)
- Tecnicas Reunidas (Spain) / Sinopec Group (China)
Aramco issued the main tender for the project in July 2024. Contractors invited to bid were initially set a deadline of 15 October that year to submit technical bids and their In-Kingdom Total Value Add (IKTVA) credentials. Commercial bids were due to be submitted by 31 October, with the deadline extended to 31 December, then to 15 January, 2025.
Jafurah gas development phases
The Jafurah basin is the largest liquid-rich shale gas play in the Middle East, spanning around 17,000 square kilometres. The reserve is estimated to contain 229 trillion cubic feet of gas and 75 billion stock-tank barrels of condensate.
Aramco brought the greenfield Jafurah gas processing plant online in early December, with a production capacity of 450 million cf/d, marking the commissioning of the first phase of its $100bn capital expenditure programme to produce gas from the unconventional resource base.
The Saudi oil company had earlier said it expected to start gas production at Jafurah in 2025, with the intention of progressively ramping up to 2 billion cf/d of sales gas, 420 million cf/d of ethane and 630,000 barrels a day (b/d) of high-value liquids by 2030.
Aramco has said that, at peak production, its unconventional gas programme is expected to generate electricity equivalent to displacing 500,000 b/d of oil.
Along with overseeing EPC works on the Jafurah fourth expansion phase project, Aramco is also nearing a decision on awarding the main EPC contract for the fifth expansion phase of the mammoth Jafurah unconventional gas development programme.
MEED recently reported that a frontrunner has emerged for the main EPC contract for the Jafurah fifth expansion phase, whose scope is similar to the programme’s fourth phase that has been awarded to LTEH.
Dubai-headquartered Wood Group has carried out the front-end engineering and design (feed) on the fifth expansion phase.
Progress on the fourth and fifth expansion phases of the Jafurah unconventional gas development programme continues as EPC work on the third phase advances.
In July 2024, Aramco issued a non-binding letter of intent to a consortium of Tecnicas Reunidas and Sinopec Group for the EPC contract for the Jafurah third expansion phase. The value of the contract is estimated to be $2.24bn.
The objective of the third expansion phase of Jafurah is similar to that of the fourth phase of development. The main scope of work involves the EPC of three gas compression plants, each with a capacity of 200 million cf/d.
The third phase’s scope of work also includes building a 230kV substation to power the new gas compression plants and installing other utilities units, piping systems and safety equipment.
The selection of contractors for the third expansion phase of the Jafurah development came within weeks of Aramco officially awarding EPC contracts for the second expansion phase, which aims to raise its processing potential to up to 2 billion cf/d of raw gas produced from the Jafurah field.
Aramco awarded 16 contracts, worth a combined total of about $12.4bn, for the second expansion phase on 30 June 2024.
The EPC scope of work on the project involves the construction of gas compression facilities and associated pipelines and the expansion of the Jafurah gas plant, including the construction of gas processing trains, utilities, sulphur and export facilities, Aramco said in a statement.
The main EPC packages of the Jafurah second expansion phase project, their estimated values and the selected contractors are:
- Package 1 – gas processing plant and main process units – $2.9bn: Larsen & Toubro Energy Hydrocarbon (India)
- Package 2 – utilities and offsites – $2.4bn: Hyundai Engineering (South Korea)
- Package 3 – gas compression units – $1bn: Larsen & Toubro Energy Hydrocarbon
- Riyas natural gas liquids (NGL) package 1 – NGL fractionation trains – $1bn: Tecnicas Reunidas / Refining & Chemical Engineering Group (part of China’s Sinopec Group)
- Riyas NGL package 2 – utilities, storage and export facilities – $2.2bn: Tecnicas Reunidas/Refining & Chemical Engineering Group
- Riyas NGL package 6 – site preparation works – $107m: Mofarreh Alharbi & Partners (Saudi Arabia)
- Riyas NGL package 9 – temporary construction facilities – $80m: Mofarreh Alharbi & Partners
Aramco kickstarted EPC works on the first phase of the programme in November 2021 by awarding $10bn-worth of subsurface and EPC contracts.
In February 2020, Aramco received a capital expenditure grant of $110bn from the Saudi government for the long-term phased development of the Jafurah unconventional gas resource base.
The Jafurah unconventional gas development programme is central to Aramco’s goal of increasing gas production capacity. The target has recently been raised to 80%, with 2021 as the baseline, up from 60%, to meet rising domestic and global demand. The company expects life-cycle investment in Jafurah to exceed $100bn.
Prior to the commissioning of the Jafurah gas plant in the last quarter of this year, Aramco completed an $11bn lease-and-leaseback deal in late October for gas processing facilities at the Jafurah unconventional gas reserve with a consortium led by funds managed by Global Infrastructure Partners (GIP), part of US asset manager BlackRock.
Under the transaction, which Aramco started in August, a newly formed subsidiary – Jafurah Midstream Gas Company (JMGC) – will lease development and usage rights to the Jafurah field gas processing plant and the Riyas natural gas liquids (NGL) fractionation facility.
After 20 years, JMGC will lease the assets back to Aramco. JMGC will collect a tariff payable by Aramco in exchange for granting Aramco the exclusive right to receive, process and treat raw gas from the Jafurah resource base.
Aramco will hold a 51% majority stake in JMGC, while the GIP-led consortium will hold the remaining 49%. Investors participating in the GIP-led consortium include Hassana Investment Company, The Arab Energy Fund (TAEF) and Aberdeen Investcorp Infrastructure Partners, as well as other institutional investors from North and Southeast Asia and the Middle East.
https://image.digitalinsightresearch.in/uploads/NewsArticle/18962987/main4448.jpg