Lehigh Valley-based Air Products announced Friday it had reached the financial close and transfer of the second group of assets for a $12 billion gasification and power joint venture with Aramco, ACWA Power, and Air Products Qudra in Jazan Economic City in Saudi Arabia.
The joint venture’s purchase of the assets follows the successful acquisition and financing transactions completed in late October 2021. Minor commissioning items will be finalized this year, the company said.
“We are very proud to mark the close on the second group of assets at Jazan, a world-scale project that is a perfect fit with our growth strategy and which supports the (Saudi) Kingdom’s Vision 2030,” Siefi Ghasemi, Air Products chairman, president and CEO said. “Consistent with our commitment, this will deliver significant contributions to our earnings going forward.”
The company said that nearly half (40 percent) of the joint venture’s capital structure will come from member contributions, and the remainder will come from non-recourse project financing.
The joint venture has purchased gasification, syngas cleanup, utilities, and power assets from Aramco and now owns and operates the facility under a 25-year contract. Aramco supplies the feedstock to the joint venture, while the joint venture pays a fixed monthly fee ad produces power, steam, hydrogen, and other utilities for Aramco.
Saudi Aramco Power Company, a subsidiary of Aramco, owns a 20 percent share of the joint venture. Air Products owns nearly half of the joint venture, with a 46 percent share. Air Products’ total ownership, including the share owned by Air Products Qudra, is 50.6 percent.
The joint venture serves Aramco’s Jazan Refinery to process 400,000 barrels of crude oil per day and produce products like ultra-light sulfur diesel, gasoline, and other products.