Saudi Aramco, Air Products, ACWA Power and Air Products Qudra on Monday announced the signing and finalisation of definitive agreements for the asset acquisition and project financing of the $12 billion air separation unit/gasification/power joint venture (JV) in Jazan Economic City.
Aramco via its subsidiary Saudi Aramco Power Company (SAPCO) has a 20 percent share in the JV; Air Products 46 percent; ACWA Power 25 percent and Air Products Qudra 9 percent.
The JV is purchasing the air separation units, gasification, syngas cleanup, utilities and power assets from Aramco and owns and operates the facility under a 25-year contract for a fixed monthly fee.
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 the crude oil to produce the main products such as ultra-light sulphur diesel, gasoline and other products.
With the completion of these definitive agreements, all parties under the joint venture expect asset transfer and funding to occur during the month of October.
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: “We are very pleased to reach this significant milestone. Aramco originally built the world’s largest integrated gasification combined cycle 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.
“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 $7.2 billion. We are optimistic that future investment offers the potential to be a game-changer in the years ahead.”
Seifi Ghasemi, Air Products chairman, president and CEO, said: “We are very proud to announce the finalisation of the definitive agreements for this complex transaction and now move forward. This is a perfect fit with our growth strategy.”
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.”
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