Gulf Construction Online - $8bn gasification JV set up in Jazan

Saudi Focus

The Jazan Economic City ... Saudi Aramco, Air Products, and Acwa Power will form a gasification/power JV in the city.

$8bn gasification JV set up in Jazan

01 September 2018

Saudi Aramco, Air Products, and Acwa Power have announced the signing of a term sheet to form a gasification/power joint venture (JV) located at Jazan Economic City (JEC).

The JV will purchase the gasification assets, power block and the associated utilities from Saudi Aramco for approximately $8 billion. These assets are currently under construction and will be transferred to the JV upon successful start-up, scheduled in 2019, said Saudi Aramco.

The JV will own and operate the facility under a 25-year contract for a fixed monthly fee. Saudi Aramco will supply feedstock to the new venture, and the JV will in turn produce power, hydrogen and other utilities for the oil conglomerate.

Air Products will own at least 55 per cent of the JV, with Saudi Aramco and Acwa Power owning the balance.

The JV will serve the Saudi oil giant’s Jazan Refinery and terminal at JEC, a megaproject that will process heavy and medium crude oil to create liquefied petroleum gas, sulphur, asphalt, benzene and paraxylene, and add 400,000 barrels per day of refining capacity.

Saudi Aramco senior vice-president of downstream Abdulaziz M Al Judaimi pointed out that the gasification/power JV would be central to the self-sufficiency of its mega-projects at Jazan.

“It 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,” he said.