Saudi Aramco, Air Products, ACWA Power and Air Products Qudra announced today the signing of definitive agreements to finance a $12 billion joint venture and acquire the air separation, gasification and electricity production unit in Jazan Economic City.
Saudi Aramco’s participation in this joint venture comes through its subsidiary, Saudi Aramco Energy Company.
and owns Aramco Saudi Arabia 20% stake in the joint venture, while Air Products owns 46%, ACWA Power owns 25%, and Air Products Qadra owns 9% of the project. Noting that the total ownership percentage of Air Products in the project is 50.6%, compared to owning 4.6% through Air Products Qudra.
Under the signed agreements, the joint venture purchases power assets, air separation, gasification, and synthesis gas purification units from Saudi Aramco, and on the basis of which the joint venture operates the respective facilities under a 25-year contract, for a fixed monthly fee. Saudi Aramco will supply the feedstock to the joint venture, which will in turn produce electricity, steam and hydrogen, as well as other products for Saudi Aramco.
The joint venture serves Saudi Aramco’s Jizan Refinery to process 400,000 barrels per day of crude oil to produce key petroleum products such as low-sulfur diesel, motor fuels, and other products.
According to the completion of these agreements, all parties to the joint venture expect the transfer of assets and financing to begin during October 2021, while Air Products intends to hold a telephone meeting with investors at that time to inform them of the project’s details.
Senior Vice President of Refining, Processing and Marketing, Mr. Muhammad Al-Qahtani, said: “Saudi Aramco has built the world’s largest complex that works with gasification and integrated combined cycle technology, and has introduced this technology for the first time in the Kingdom to keep pace with the industrial and economic development in the southern region. This joint venture will be a mainstay of the pillars Self-sufficiency in our mega projects in Jazan, and it will also improve the overall value of the refinery and power plant that operates with this technology, contributing to a qualitative leap in the region by preparing Jazan Economic City for more foreign direct investment and the participation of the private sector. The participation of the Saudi Industrial Development Fund as well as 23 local and international financiers in this deal to secure a total of $7.2 billion. We are optimistic that the upcoming investments will set the stage for the energy landscape in the coming years.”
For his part, Air Products’ Chairman, President and Chief Executive Officer, Seifi Qassemi, said: “We are very proud to announce the finalization of the formula for the final agreements for this deal, and to move forward in line with our development strategy because of the investment that it entails that will benefit and benefit Air Products. In addition to benefiting from our basic capabilities in the context of the purification and production of synthetic gas.We are also pleased in the first place to strengthen our relationship with Saudi Aramco, the largest company in the world, and to build a partnership with ACWA Power and Qudra Energy in the framework of this giant project that will support the Kingdom’s vision 2030 in addition to Building partnerships that achieve common development.
For his part, ACWA Power’s Chairman, Mohamed Abunayyan, said: “The successful financial agreement concluded today is the largest agreement of its kind in the history of ACWA Power. We are in the process of a historic project for the energy sector in the Kingdom, through which we are proud of our partnership and close cooperation with With the aim of diversifying the energy mix in the Kingdom and raising the efficiency of the sector, we will make the Jazan complex an integrated gasification and combined cycle energy production project, which will be the largest of its kind in the world. We are also proud of adding a new achievement page to ACWA Power’s track record of training, refining and qualifying Saudi human talents, which contributes to raising the specialized technical skills and capabilities necessary to meet the needs of the sector.”