JV Partners Finalize Agreements for Saudi Gas Project
US industrial gases company Air Products, together with its Saudi-based subsidiary Air Products Qudra, Saudi Aramco and ACWA Power have signed definitive agreements for the asset acquisition and project financing of the $12 billion air separation unit gasification/power joint venture they will operate in Jazan Economic City, Saudi Arabia.
With completion of the agreements, the companies said they expect asset transfer and funding to be finalized over the course of October 2021. Through the Saudi Industrial Development Fund (SIDF) and 23 local and international lenders, the joint venture partners secured $7.2 billion in funding for the project.
Air Products, together with its Saudi-based arm Air Products Qudra (which holds a 4.6% share), controls 50.6% of the joint company, with ACWA Power owning 25% and Aramco through its subsidiary Saudi Aramco Power Company (SAPCO) 20%.
The consortium was founded in 2018 to enhance the overall value of the Jazan refinery and integrated gasification combined cycle power plant and help position Jazan Economic City (JEC) for additional Foreign Direct Investment (FDI) and private sector involvement. This is expected to be the largest integrated project of its kind worldwide.
As part of the plans, the four-way partnership, which will own and operate the facility under a 25-year contract, is purchasing the ASUs, gasification, syngas cleanup, utilities and power assets from Aramco, which will supply feedstock to the joint venture. In turn, the JV will produce power, steam, hydrogen and other utilities for Aramco.
Ultimately, the JV will supply Aramco’s Jazan Refinery, a megaproject that process 400,000 bbl/d of crude oil to produce products such as ultra-light sulfur diesel, gasoline and other products.
Air Products chairman, president and CEO Seifi Ghasemi said the plans are “a perfect fit” with his company’s growth strategy, a value-creating investment that leverages its core syngas purification and industrial gas production capabilities. Most importantly, Ghasemi, said, participating in the JV further strengthen Air Products’ relationship with Aramco, ACWA Power and Qudra Energy in the megaproject that supports the Saudi Kingdom’s Vision 2030 and building partnerships for mutual growth.
Author: Dede Williams, Freelance Journalist
