Saudi Aramco, Air Products and ACWA Power signed a framework agreement to set up a joint venture for gasification and power at Jazan Economic City in Saudi Arabia.
The joint venture will purchase the gasification assets, power block and the associated utilities from Saudi Aramco for over $8 billion approximately, Saudi Aramco said in a statement. These assets are currently under construction and will be transferred to the joint venture upon successful start-up, scheduled in 2019.
According to the term sheet, Air Products will own at least 55 percent of the JV, with Saudi Aramco and ACWA Power owning the balance.
The joint venture will own and operate the facility under a 25-year contract for a fixed monthly fee. Saudi Aramco will supply feedstock, with the new company producing power, hydrogen and other utilities for Saudi Aramco.
“The JV will serve Saudi Aramco’s Jazan Refinery and terminal at JEC, a megaproject that will 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,” the statement said.
“The Gasification/Power JV will be central to the self-sufficiency of our megaprojects at Jazan,” said Abdulaziz M. Al-Judaimi, Saudi Aramco’s senior vice president of downstream. “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.”
Air Products chairman, president and CEO, Seifi Ghasemi, said the company earlier this year, acquired the patents for the Shell liquids gasification technology, which is the core technology for the Jazan gasification facility.
“Building on the success of our Lu’An project in China, this new project further extends Air Products’ leadership position supplying syngas to major companies around the world,” he added.