Saudi Aramco, Air Products, and ACWA Power have agreed to form a $8bn Gasification/Power joint venture (JV) located at Jazan Economic City (JEC) in Saudi Arabia.
As part of this plan, the firms have signed an agreement outlining terms for setting up the gasification/power joint venture, which will purchase the gasification assets, power block and the associated utilities from Saudi Aramco for $8bn.
The assets considered for sale by Saudi Aramco to JV are currently under construction, and are planned to be transferred to the JV upon successful start-up scheduled in 2019.
Saudi Aramco downstream senior vice-president Abdulaziz Al-Judaimi said: “The Gasification/Power JV will be central to the self-sufficiency of our megaprojects at Jazan.
“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 JEC for additional foreign direct investment and private sector involvement.”
The joint venture, which will receive feedstock from Saudi Aramco, will serve the Saudi Aramco’s Jazan Refinery and terminal located at JEC.
The megaproject will have capacity to process heavy and medium crude oil to create liquefied petroleum gas, sulfur, asphalt, benzene and paraxylene, and add 400,000 barrels per day of refining capacity.
Air Products chairman, president and CEO Seifi Ghasemi said: “Earlier this year, Air Products acquired the patents for the Shell liquids gasification technology, which is the core technology for the Jazan gasification facility.
“We appreciate the trust that Saudi Aramco continues to place in us, first in awarding us the air separation unit, and now moving toward an expanded scope of supply at Jazan.”
The JV, which will own and operate the facility under a 25-year contract for a fixed monthly fee, will be at least 55% owned by Air Products while Saudi Aramco and ACWA Power will have the remaining stake.
ACWA Power chairman Mohammad Abunayyan said: “ACWA Power plays an important role in the power sector in the Kingdom and welcomes the opportunity to assist in the further development of Jazan economic corridor.”