Chinese state banks are lending billions to Aramco’s Jafurah gas project, but have declined to invest in the venture. Bank of China, ICBC, and China Construction Bank each lent about $1 billion, with Agricultural Bank of China contributing around $750 million. Aramco signed an $11 billion lease-and-leaseback deal for processing facilities with a consortium led by Global Infrastructure Partners.

Despite being offered the chance to participate in the equity funding round for Jafurah, Chinese funds did not join, citing U.S.-China trade tensions. This contrasts with Aramco’s 2022 deal, where Chinese funds were involved in a pipeline venture. The absence of Chinese funds reflects the impact of deteriorating U.S.-China trade relations on deal-making in the Gulf.

Aramco’s Jafurah project is crucial to Saudi Arabia’s goal of becoming a major global player in natural gas. The project aims to increase the country’s gas production capacity by 60% by 2030 compared to 2021 levels. Jafurah Midstream Gas Company will lease processing assets to Aramco for 20 years, with Aramco holding 51% and a GIP-led group holding 49%.

BlackRock’s GIP has led the equity group for Jafurah, with investors like Abu Dhabi’s Mubadala and Lunate also participating in the deal. Aramco, BlackRock, Mubadala, and Lunate declined to comment on the matter. Beijing’s influence on state funds has led to caution in dealing with U.S. private-capital firms, as reported by the Financial Times in April.

Hutchison’s plan to sell 43 ports to a BlackRock-MSC consortium faced backlash from Beijing earlier this year. Under Chinese pressure, Hutchison is now considering adding COSCO to the deal. President Donald Trump has expressed concerns about China’s involvement in the Panama Canal, prompting discussions about limiting Chinese influence in the strategic waterway.

Read more at Yahoo Finance: Exclusive-China’s banks lend to Saudi gas project while its funds sit out of BlackRock-led deal, sources say