RIYADH: Saudi Aramco, Air Products, ACWA Power and Air Products Qudra on Monday signed asset acquisition and project financing agreements for a $12 billion air separation unit, gasification and power joint venture in Jazan Economic City, said a press release.
Aramco via its subsidiary Saudi Aramco Power Co. has a 20 percent share in the JV; Air Products 46 percent; ACWA Power 25 percent; and Air Products Qudra 9 percent. Air Products’ total ownership position is 50.6 percent by owning an additional 4.6 percent through Air Products Qudra.
The JV is purchasing the ASUs, gasification, syngas cleanup, utilities and power assets from Aramco. The JV owns and operates the facility under a 25-year contract for a fixed monthly fee. Aramco will supply feedstock to the JV, and the JV will produce power, steam, hydrogen and other utilities for Aramco.
“This JV is meant to be central to the self-sufficiency of our megaprojects at Jazan. We believe the JV will enhance the overall value of the refinery and integrated gasification combined cycle power plant, and aid in transforming the province by positioning Jazan Economic City for additional foreign investment and private sector involvement,” said Mohammed Al-Qahtani, senior vice president of downstream, Saudi Aramco.
“We are pleased to have the Saudi Industrial Development Fund and 23 local and international lenders engaged in this transaction securing a total of $7.2 billion. We are optimistic that future investment offers the potential to be a game-changer in the years ahead.”
The JV serves Aramco’s Jazan Refinery, a megaproject to process 400,000 barrels per day of the crude oil to produce the main products such as ultra-light sulfur diesel, gasoline, and other products.
All parties under the joint venture expect asset transfer and funding to occur during October 2021. Air Products intends to conduct a public investor call at that time.
Seifi Ghasemi, Air Products chairman, president and CEO, said the project is a “perfect fit with our growth strategy. It is a value-creating investment for Air Products and leverages our core syngas purification and industrial gas production capabilities.”
Mohammad Abunayyan, chairman of ACWA Power, said: “A monumental shift is underway in Saudi Arabia’s energy sector… Jazan IGCC is set to be the largest integrated project for gasification and combined cycle energy production in the world.”