Saudi Aramco has started talks with potential backers for its $110bn Jafurah gas development, according to people familiar with the matter, as the oil producer plans to exploit one of the world’s largest unconventional gas fields.
The state-controlled company is seeking equity investors that could help fund the development of midstream and downstream projects at Jafurah in the east of the kingdom, the people said, asking not to be identified as the information is private.
Aramco has reached out to private equity firms and other large funds that invest in infrastructure as part of the plans, which could offer stakes in assets such as carbon capture and storage projects, pipelines and hydrogen plants, the people said.
Saudi Aramco seeks investors
Investment bank Evercore is advising Saudi Aramco on the plans, the people said.
Talks are still at an early stage and details of the funding could change, the people said.
A representative for Saudi Aramco declined to comment, while a spokesperson for Evercore didn’t have an immediate comment.
The war in Ukraine has led to a frantic surge in demand for natural gas, led by European nations that traditionally got their supplies from Russia.
This has led to Gulf states embarking on ambitious plans to expand their gas output. Some companies have also look to boost their exposure, with Eni SpA considering a takeover of explorer Neptune Energy Group, Bloomberg News has reported.
Jafurah is a key part of Saudi Arabia’s strategy to diversify its energy exports beyond oil.
The field is estimated to hold 200tn cubic feet of raw gas, and Aramco expects to begin production there in 2025, reaching about 2bn standard cubic feet per day of sales by 2030.
A large portion of the gas produced there will be used to create so-called blue hydrogen, Energy Minister Abdulaziz bin Salman said last year.
The process is where emissions associated with hydrogen production are captured and stored in Saudi Arabia, allowing the fuel to then be exported as a clean energy source.
The opening up of the Jafurah development to external investors would follow years of efforts to attract foreign capital into Saudi Aramco and some of its key assets.
The deals have raised about $28bn for the company.
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