Saudi Aramco Forms $8bn Joint Venture with Acwa and Air Products

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Saudi Aramco. the world’s biggest oil producing company. said on Sunday it has agreed to form an $8 billion power and gasification joint venture with Saudi Arabia’s energy producer Acwa Power and US-based Air Products.

Air Products will hold at least a 55 per cent stake in the joint venture. which will buy from Aramco gasification assets. power block and associated facilities located in the kingdom’s Jazan Economic City. Aramco and Acwa will own the remainder of the joint venture.

Saudi Aramco will supply feed stock to the joint venture. which in turn will produce power and hydrogen for the Saudi oil producer.

“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.“ Aramco said in a statement.

“The consortium will increase job opportunities and transfer the most advanced technologies in this field to the Kingdom. and enable Saudi talent to employ this technology for the first time.“

State-owned Aramco is building a 23 billion (Dh22.5bn) refinery in Jazan Economic City on the Red Sea coast. which is part of the kingdom’s plans to develop industrial zones. create jobs and attract foreign direct investment.

The 400.000 barrel-a-day facility will process heavy and medium crude oil to create liquefied petroleum gas. sulfur. asphalt. benzene and paraxylene.

“The Gasification Power JV will be central to the self-sufficiency of our megaprojects at Jazan.“ said Saudi Aramco Senior Vice President of Downstream Abdulaziz Al Judaimi. “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.“

The joint venture will own and operate the assets for a fixed monthly fee under a 25-year contract. These assets are currently under construction and will be transferred to the joint venture upon scheduled completion in 2019.