BEIJING, Oct 26 – Chinese state-owned banks are financing a multi-billion dollar Saudi Arabian gas project despite the country’s sovereign wealth fund opting out of a related deal led by BlackRock, according โto three sources with direct knowledge of the matter. The project, known as the jafurah basin development, isโฃ Saudi Aramco’s โขlargest โฃnatural gas field and is crucial to theโ Kingdom’s plans to boost gas production and reduce reliance on oil.
While Saudi Arabia’s Public Investment Fund (PIF) โparticipated in a $15 billion deal with BlackRock to invest in energy infrastructure, it declined toโ invest โdirectly โฃin Jafurah, sources said. This decision created space for Chinese banks, including Industrial and Commercialโ Bankโ of China (ICBC) and Bank of โChina, to step in and provide substantial loans for the project’s development. the move highlights China’s growing economic influence in the Middle East โand its strategic interest in securing energy supplies.
the Jafurah basin, discovered in โข2019, holds an estimated 200 trillion cubic โขfeet of natural gas.โข Saudi Aramco aims โto produceโข 2.4 billion cubic feet per day of gas from the field by 2030, aโข significant โincrease โfrom current levels. The project involves โthe development โof a massive gas processing plant and extensive pipeline โคinfrastructure.
The Chinese banks’ involvement comes as Saudi Arabia seeks to diversify its partnerships beyond โฃconventional western investors. The Kingdom โขis increasingly lookingโ to Asia, particularly China, as a key economic partner. The loans from ICBC andโค Bank of Chinaโฃ are reportedly structured โคasโ project finance deals,secured against the future revenues of โขtheโฃ Jafurah field.
“The PIF’s decision โคnot to directly invest in Jafurah presented an possibility for Chinese banks to strengthenโฃ thier ties with Saudi โAramco and gain โขexposure toโ a strategically significant energy project,” said one source.โข “This is a clear signal of โChina’s commitment to the Saudi energy sector.”
the BlackRock-led deal, announced inโ September, focuses on investing inโค a broaderโข range of energy infrastructure projects, including renewable โenergy and traditional oil and gas. The PIF’s participation in that dealโ reflects its broaderโข strategy of diversifying its โฃinvestment portfolio.