Saudi Aramco, Air Products (APD), ACWA Power and Air Products Qudra have finalized definitive agreements for the acquisition and project financing of the $12 billion air separation unit (ASU)/gasification/power joint venture (JV) in Jazan Economic City in Saudi Arabia.
The JV, first announced in 2019, will purchase ASUs, gasification, syngas clean-up, utilities and power assets from Aramco. It owns and operates the facility under a 25-year contract for a fixed monthly fee.
Saudi Arabia’s multinational petroleum and natural gas company, Aramco through its subsidiary Saudi Aramco Power Company (SAPCO), has a 20 percent share in the joint venture and Saudi’s power plant developer, ACWA Power holds 25 percent. The American international corporation, Air Products holds 46 percent of shares in the JV and Air Products Qudra has 9 percent.
As part of the agreement, Aramco will supply feedstock to the JV, and the JV will produce power, steam, hydrogen and other utilities for Aramco. The JV serves Aramco’s Jazan Refinery, a megaproject to process 400,000 barrels per day of crude oil to produce the main products such as ultra-light sulfur diesel, gasoline, and other products.
Upon completion of the definitive agreement, all parties under the JV expect asset transfer and funding to occur during October 2021. Air Products intends to conduct a public investor call at that time.
Mohammed Al Qahtani SVP – Downstream Aramco
“Aramco originally built the world’s largest integrated gasification combined cycle (IGCC) complex to employ gasification technology for the first time in the Kingdom and to keep pace with the development of the Kingdom’s Southern Province industrially and economically. 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.”
The Chairman, President and CEO of Air Products, Mr. Seifi Ghasemi, said, “We are very proud to announce the finalization of the definitive agreements for this complex transaction and now move forward. This 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.”
Mr. Mohammad Abunayyan, chairman of ACWA Power, said, “The successful financial agreement concluded today is the largest agreement of its kind in ACWA Power’s history and highlights our continued firm commitment to the Kingdom’s Vision 2030 and its strategic goals for the energy sector. A monumental shift is underway in Saudi Arabia’s energy sector, and we are proud of our partnership and close collaboration with Aramco and Air Products towards diversifying the energy mix and increasing the efficiency of the sector. Drawing on the pioneering expertise and capabilities of all joint venture partners, Jazan IGCC is set to be the largest integrated project for gasification and combined cycle energy production in the world.”
