Saudi Aramco continues to move swiftly toward building up a major presence in the downstream sector. Days after pledging to take German specialty chemicals producer Lanxess’ 50% share in the Arlanxeo synthetic rubber joint venture, the world’s largest oil producer has agreed to form a joint venture with US industrial gases group Air Products and Saudi utility company AWCA Power.

For a price of more than $8 billion, the new company to be based at Jazan Economic City (JEC), Saudi Arabia and start up in 2019 plans to purchase the gasification assets, power block and associated utilities of Saudi Aramco that are currently under construction and supply the oil group’s Jazan refinery.

Air Products will own at least 55% of the joint venture, with Saudi Aramco and ACWA Power splitting the unquantified balance. Under a 25-year contract, the partners would own and operate the facility for a fixed monthly fee, with Saudi Aramco producing feedstock and the joint enterprise providing electricity, hydrogen and other utilities for the oil giant.

Aramco’s Jazan refinery and terminal at JEC is part of a megaproject that will process heavy and medium crude oil to liquefied petroleum gas, sulfur, asphalt, benzene and paraxylene, as well as produicng 400,000 bbl/d per day of refining capacity.

Abdulaziz M. Al-Judaimi, Saudi Aramco’s senior vice president of downstream, said the gasification/power jv is central to the self-sufficiency of his group’s megaprojects at Jazan, enhancing the overall value of the refinery, creating an integrated gasification combined cycle power plant and positioning JEC for additional foreign direct investment and private sector involvement.

Air Products earlier this year acquired the patents for the Shell liquids gasification technology, which will be the core technology used in the Jazan gasification facility. Saudi Aramco has also awarded the US gases group the contract to build the project’s air separation unit.

ACWA Power Chairman, Mohammad Abunayyan said the collaboration with industry-leading companies such as Saudi Aramco and Air Products is a “direct result of the recognition of the need to innovate new structure as part of Saudi Arabia’s Vision 2030.”