The state-owned oil company of Saudi Arabia, Saudi Aramco, signed a term sheet agreement to form a gasification and power joint venture (JV) with Air Products and ACWA Power, the company announced on Sunday.
The JV facility will be located at the Jazan Economic City (JEC) in Saudi Arabia, the statement read, adding that it would purchase the gasification assets, power block and the associated utilities from Saudi Aramco for approximately over $8 billion.
"These assets are currently under construction and will be transferred to the JV upon successful start-up, scheduled in 2019," the company noted.
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 facility that will produce power, hydrogen and other utilities for Saudi Aramco.
The JV will serve Saudi Aramco's Jazan Refinery and terminal at JEC, a mega project 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.
Air Products will own at least 55 percent of the JV, while Saudi Aramco and ACWA Power will hold the remaining share interests, Saudi Aramco added.
"The JV builds upon the importance and recognition that critical infrastructure assets in the region are being developed and operated under the Public Private Partnership (PPP) model," the company said.
By Ebru Sengul