Agreements concluded for ASU/gasification/power joint venture

Operators at a Saudi Aramco Facility 1Aramco, Air Products, ACWA Power and Air Products Qudra have signed the agreements for the asset acquisition and project financing of the US$12bn air separation unit (ASU)/gasification/power joint venture (JV) in Jazan Economic City

Aramco through its subsidiary Saudi Aramco Power Company (SAPCO) has a 20% share in the JV; Air Products 46%; ACWA Power 25%; and Air Products Qudra 9%. 

The JV is purchasing the ASUs, gasification, syngas cleanup, utilities and power assets from Aramco. The JV 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, which processes 400,000 barrels per day of crude oil to produce products such as ultra-light sulphur diesel, gasoline, and other products. 

Asset transfer and funding is expected to occur in October 2021. Air Products intends to conduct a public investor call at that time.

Mohammed Al Qahtani, senior vice-president of downstream, Aramco, said, “We are very pleased to reach this significant milestone. 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 US$7.2Bn.  We are optimistic that future investment offers the potential to be a game-changer in the years ahead.”

Air Products Chairman, president and CEO, Seifi Ghasemi, 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. It is a value-creating investment for Air Products and leverages our core syngas purification and industrial gas production capabilities. Most importantly, it is a privilege to further strengthen our relationship with Aramco, and to partner with ACWA Power and Qudra Energy in this megaproject, which supports the Kingdom’s Vision 2030 and building partnerships for mutual growth.”

Mohammad Abunayyan, chairman of ACWA Power, said, “The successful financial highlights our continued firm commitment to the Kingdom’s Vision 2030 and its strategic goals for the energy sector. Drawing on the pioneering expertise and capabilities of all joint venture partners, Jazan IGCC is set to be the largest integrated project for gasification and combined cycle energy production in the world. Bringing the most advanced technologies to the Kingdom, the Jazan project will push the boundaries. We are also exceptionally proud to add to ACWA Power’s track record in training and upskilling Saudi talent to meet the requirements of the sector.”

The JV was formed in 2018 to enhance the overall value of Jazan refinery and integrated gasification combined cycle power plant.

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