The JV will own and operate the facility for a period of 25 years. Credit: Saudi Arabian Oil Co.

Saudi Aramco, Air Products and ACWA Power are set to form an $8bn Gasification/Power joint venture (JV) in Jazan Economic City (JEC) in Saudi Arabia.

The companies have signed a term sheet to form the JV, which will buy the gasification assets, power block and the associated utilities from Saudi Aramco for more than $8bn.

The assets are currently under construction and will be transferred to the JV upon start-up, which is set to take place next year.

The facility will be owned and operated by the JV under a 25-year contract.

Saudi Aramco downstream senior vice-president Abdulaziz Al-Judaimi said: “The Gasification/Power JV will be central to the self-sufficiency of our megaprojects at Jazan.

“This new project further extends Air Products’ leadership position supplying syngas to major companies around the world.”

“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.”

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Saudi Aramco will supply feedstock to the JV, which in turn will produce power, hydrogen and other utilities for the company.

Air Products will own at least 55% of the JV, with the remaining stake to be owned by Saudi Aramco and ACWA Power.

The JV will serve Saudi Aramco’s Jazan refinery and terminal located at JEC that will process heavy and medium crude oil to create liquefied petroleum gas, sulfur, asphalt, benzene and paraxylene.

It will also add 400,000 barrels a day of refining capacity.

Air Products chairman, president and CEO Seifi Ghasemi said: “Building on the success of our Lu’An project in China, this new project further extends Air Products’ leadership position supplying syngas to major companies around the world.

“We appreciate the trust that Saudi Aramco continues to place in us, first in awarding us the air separation unit, and now moving toward an expanded scope of supply at Jazan.”

Ghasemi further added that the JV advances the efforts of the public private partnership (PPP) model to develop critical infrastructure assets in the region.