Saudi Aramco forms $8 bln Power JV with ACWA Power, Air Products

Saudi Aramco, Air Products (NYSE: APD), and ACWA Power signed today a Term Sheet to form a Gasification/Power joint venture at Jazan Economic City (JEC).
 

The JV will purchase the gasification assets, power block and the associated utilities from Saudi Aramco for about $8 billion, the three companies said in a joint statement. 
 

"The assets are currently under construction and will be transferred to the JV upon successful start-up, scheduled in 2019," the statement said. 
 

The JV will operate and own the facility under a 25-year contract term for an unspecified fixed monthly fee. Saudi Aramco will supply the JV with feedstock, and the JV will produce power, hydrogen and other utilities for the state-owned oil company. 
 

Air Products will own at least 55 percent of the JV, with Saudi Aramco and ACWA Power owning the balance, the statement said.
 

The new JV will serve Jazan Refinery and its terminal at JEC, a megaproject that will process heavy and medium crude oil to create liquefied petroleum gas, asphalt, benzene, sulfur and paraxylene. It will also add 400,000 barrels per day of refining capacity.
 

“The Gasification/Power JV will be central to the self-sufficiency of our megaprojects at Jazan. 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,” Saudi Aramco Senior Vice President of Downstream Abdulaziz M. Al-Judaimi said.