Saudi Aramco, Air Products, Acwa Power, and Air Products Qudra announced today the signing of final agreements to finance a joint project worth $12 billion and acquire air separation, gasification, and electricity production units in the Jazan Economic City. Aramco’s participation in this joint venture is through its subsidiary, Aramco Energy Company. Aramco holds a 20% stake in the joint venture, while Air Products has a 46% stake, Acwa Power holds 25%, and Air Products Qudra possesses 9%. It is noted that Air Products’ total ownership in the project is 50.6%, as it holds 4.6% through Air Products Qudra.
Under the signed agreements, the joint venture will acquire energy assets and air separation and gasification units from Saudi Aramco, which will operate the relevant facilities under a 25-year contract in exchange for a fixed monthly fee. Saudi Aramco will supply feedstock to the joint venture, which will in turn produce electricity, steam, hydrogen, and other products for Saudi Aramco.
This joint venture will serve Aramco’s Jazan refinery, which processes 400,000 barrels per day of crude oil to produce key petroleum derivatives such as low-sulfur diesel, gasoline, and other products. Upon completing these agreements, all parties to the joint venture expect asset transfer and financing to begin in October 2021, while Air Products intends to hold a conference call with investors at that time to provide details about the project.
Mohammed Al-Qahtani, Senior Vice President of Refining, Processing, and Marketing, stated, "Saudi Aramco has built the world's largest integrated gasification and combined cycle complex, introducing this technology for the first time in the Kingdom in line with industrial and economic developments in the southern region. This joint venture will be a fundamental pillar for self-sufficiency in our massive projects in Jazan, enhancing the overall value of the refinery and the power generation station using this technology, contributing to a qualitative shift in the region by preparing the Jazan Economic City for more foreign direct investments and private sector participation. We are also pleased to involve the Saudi Industrial Development Fund and 23 local and international financiers in this deal to secure a total of $7.2 billion. We are optimistic that the upcoming investments will shape the energy landscape in the coming years."
Safi Qasimi, Chairman and CEO of Air Products, remarked, "We are very proud to announce the final agreements for this deal and to move forward in line with our development strategy as it involves investments that benefit Air Products, as well as leveraging our core capabilities in synthetic gas purification and production. Additionally, we are pleased to enhance our relationship with Saudi Aramco, the world’s largest company, and to build a partnership with Acwa Power and Qudra Energy within this giant project that will support the Kingdom’s Vision 2030 and build partnerships for mutual development."
Mohammed Abunayyan, Chairman of Acwa Power, stated, "The successful financial agreement signed today is the largest of its kind in Acwa Power's history. We are on the verge of a historic project for the energy sector in the Kingdom, where we take pride in our partnership and close cooperation with Saudi Aramco and Air Products to diversify the energy mix in the Kingdom and enhance the sector's efficiency. Relying on the leading expertise and capabilities of all joint venture partners, we will make the Jazan complex a comprehensive gasification and power production project, the largest of its kind in the world. By using the latest technologies, the Jazan project will push boundaries towards a bright future. We also take pride in adding a new achievement to Acwa Power’s distinguished record, represented in training and developing Saudi human talents to enhance the skills and technical capacities needed to meet sector demands."
