Aramco, Air Products (NYSE: APD), ACWA Power and Air Products Qudra announced the signing and finalization of definitive agreements for the asset acquisition and project financing of the $12 billion air separation unit (ASU)/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. Moreover, Air Products’ total ownership position is 50.6 percent by owning an additional 4.6 percent through Air Products Qudra.

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, 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 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. 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. 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 $7.2Bn. 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 finalization 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, the world’s largest company, 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 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. 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.”

About Aramco

Aramco is a global integrated energy and chemicals company driven by the core belief that energy is opportunity. From producing approximately one in every eight barrels of the world’s oil supply to developing new energy technologies, our global team is dedicated to creating impact in all that we do. We focus on making our resources more dependable, sustainable and useful, promoting stability and long-term growth around the world.