MOSCOW (MRC) -- Saudi Aramco, Air Products and ACWA Power are set to form an USD8bn Gasification/Power joint venture (JV) in Jazan Economic City (JEC) in Saudi Arabia, as per Hydrocarbons-technology.
The companies have signed a term sheet to form the JV, which will buy the gasification assets, power block and the associated utilities from Saudi Aramco for more than USD8bn.
The assets are currently under construction and will be transferred to the JV upon start-up, which is set to take place next year.
The facility will be owned and operated by the JV under a 25-year contract.
Saudi Aramco downstream senior vice-president Abdulaziz Al-Judaimi said: "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 will supply feedstock to the JV, which in turn will produce power, hydrogen and other utilities for the company.
Air Products will own at least 55% of the JV, with the remaining stake to be owned by Saudi Aramco and ACWA Power.
The JV will serve Saudi Aramco’s Jazan refinery and terminal located at JEC that will process heavy and medium crude oil to create liquefied petroleum gas, sulfur, asphalt, benzene and paraxylene.
It will also add 400,000 barrels a day of refining capacity.
Air Products chairman, president and CEO Seifi Ghasemi said: "Building on the success of our Lu’An project in China, this new project further extends Air Products’ leadership position supplying syngas to major companies around the world.
"We appreciate the trust that Saudi Aramco continues to place in us, first in awarding us the air separation unit, and now moving toward an expanded scope of supply at Jazan."
Ghasemi further added that the JV advances the efforts of the public private partnership (PPP) model to develop critical infrastructure assets in the region.
As MRC reported previously, in July 2017, Saudi Aramco and France's Total unveiled plans to build a mixed-feed cracker and derivatives in Jubail, near their joint refining complex. The cracker is expected to have a capacity of 1.5 MMtpy.
Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
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