Saudi Aramco, U.S.-based Air Products and ACWA Power Monday announced the signing of a term sheet to form an $8 billion-plus gasification/power joint venture, located at Jazan Economic City, Saudi Arabia.
The JV will purchase the gasification assets, power block and the associated utilities from Saudi Aramco for over $8 billion, Kallanish Energy finds. These assets are currently under construction and will be transferred to the JV upon start-up, currently scheduled for 2019.
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 (Bpd) of refining capacity.
"The gasification/power JV will be central to the self-sufficiency of our megaprojects at Jazan,” said Abdulaziz M. Al-Judaimi, Saudi Aramco 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."
The JV will own and operate the facility under a 25-year contract for a fixed monthly fee. Saudi Aramco will supply feedstock to the JV, and the JV will produce power, hydrogen and other utilities for Saudi Aramco.
Industrial gases giant Air Products will own at least 55% of the JV, with Saudi Aramco and ACWA Power owning the balance. The JV builds upon the importance and recognition infrastructure assets in the region are being developed and operated under the Public Private Partnership (PPP) model.
ACWA Power is a developer, investor and operator of a power generation and desalinated water production plants currently operating in 10 countries in the Middle East, north Africa, southern Africa and southeast Asia.
The company is owned by the Public Investment Fund of Saudi Arabia, the Saudi Public Pensions Agency and the International Finance Corp. (a member of the World Bank Group) and seven Saudi conglomerates.