Saudi Aramco, Air Products, ACWA Power, and Air Products Qudra sign agreements for $12bn JV in Jazan

Saudi Aramco, Air Products, ACWA Power and Air Products Qudra announced the signing and finalisation of definitive agreements for the asset acquisition and project financing of the $12bn joint venture (JV) in Jazan Economic City.

Aramco via its subsidiary Saudi Aramco Power Company (SAPCO) has a 20 per cent share in the air separation unit (ASU)/gasification/power JV; Air Products holds 46 per cent; ACWA Power 25 per cent; and Air Products Qudra has 9 per cent. Moreover, Air Products’ total ownership position is 50.6 per cent by owning an additional 4.6 per cent through Air Products Qudra.

The JV is purchasing the ASUs, gasification, syngas cleanup, utilities and power assets from Aramco, while owning and operating the facility under a 25-year contract for a fixed monthly fee. Aramco will supply feedstock to the JV, which will then produce power, steam, hydrogen and other utilities for Aramco.

The JV serves Aramco’s Jazan Refinery, a project to process 400,000 barrels per day of the crude oil to produce the main products such as ultra-light sulphur diesel, gasoline, and other products. With the completion of these agreements, all parties under the joint venture expect asset transfer and funding to happen during October 2021.

Air Products intends to conduct a public investor call at that time, a statement said.

Mohammed Al Qahtani, senior vice president of downstream, Aramco said: “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.

“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. In fact, we are pleased to have the Saudi Industrial Development Fund (SIDF) and 23 local and international lenders engaged in this transaction securing a total of $7.2bn.”

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. “