(Bloomberg) -- Saudi Aramco, Air Products and ACWA Power said on Sunday that they had signed a deal to form an $8 billion gasification and power joint venture in Saudi Arabia.
The new entity, which will be located in the kingdom’s Jazan Economic City, will purchase gasification assets, power block and associated utilities from state-owned Aramco for about $8 billion, the companies said in a joint statement. The assets are currently under construction and will be transferred to the joint venture upon start-up, which is scheduled for 2019.
The new venture will feed Aramco’s Jazan refinery and terminal on the Red Sea coast, a project that will process medium and heavy crude oil to produce liquefied petroleum gas, sulfur and other products. It’s also expected to add 400,000 barrels per day of refining capacity.
The joint venture “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,” Abdulaziz M. Al-Judaimi, Aramco senior vice president of downstream, said in the statement.
The joint venture will operate the facility for a 25-year period at a fixed monthly fee. Aramco will provide the feedstock, and the joint venture will produce power, hydrogen and other utilities for Aramco. Air Products will hold at least 55 percent of the joint venture, with Aramco and ACWA holding the balance.
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