Aramco, Air Products, ACWA Power, and Air Products Qudra Sign Asset Acquisition and Project Financing Agreements for $12 Billion ASU/Gasification/Power Joint Venture in Jazan, Saudi Arabia
The collaboration between Aramco, Air Products (NYSE: APD), ACWA Power, and Air Products Qudra has resulted in the finalization of agreements for a $12 billion joint venture in Jazan Economic City. Air Products holds a 50.6% stake, while Aramco has 20%. The joint venture will operate under a 25-year contract, providing essential utilities to Aramco's Jazan Refinery. The deal is supported by $7.2 billion in financing from various lenders. All asset transfers and funding are expected to be completed by October 2021, strengthening existing partnerships and facilitating economic development in the region.
- Air Products gains a 50.6% ownership position in a high-value $12 billion joint venture.
- The venture is expected to enhance operational synergies with Aramco's Jazan Refinery, driving long-term revenue growth.
- Secured $7.2 billion in project financing from local and international lenders, ensuring strong financial backing.
- None.
DHAHRAN, Kingdom of Saudi Arabia and RIYADH, Kingdom of Saudi Arabia and LEHIGH VALLEY, Pa., Sept. 27, 2021 /PRNewswire/ -- Aramco, Air Products (NYSE: APD), ACWA Power and Air Products Qudra today announced the signing and finalization of definitive agreements for the asset acquisition and project financing of the
Aramco via its subsidiary Saudi Aramco Power Company (SAPCO) has a 20 percent share in the JV; Air Products 46 percent; ACWA Power 25 percent; and Air Products Qudra 9 percent. Moreover, Air Products' total ownership position is 50.6 percent by owning an additional 4.6 percent through Air Products Qudra.
The JV is purchasing the ASUs, gasification, syngas cleanup, utilities and power assets from Aramco. The JV owns and operates the facility under a 25-year contract for a fixed monthly fee. Aramco will supply feedstock to the JV, and the JV will produce power, steam, hydrogen and other utilities for Aramco.
The JV serves Aramco's Jazan Refinery, a megaproject to process 400,000 barrels per day of the crude oil to produce the main products such as ultra-light sulphur diesel, gasoline, and other products.
With the completion of these definitive agreements, all parties under the joint venture expect asset transfer and funding to occur during the month of October 2021. Air Products intends to conduct a public investor call at that time.
Mohammed Al Qahtani, Senior Vice President of Downstream, Aramco said: "We are very pleased to reach this significant milestone. Aramco originally built the world's largest integrated gasification combined cycle (IGCC) complex to employ gasification technology for the first time in the Kingdom and to keep pace with the development of the Kingdom's Southern Province industrially and economically. This JV is meant to be central to the self-sufficiency of our megaprojects at Jazan. We believe 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 Jazan Economic City for additional foreign investment and private sector involvement. In fact, we are pleased to have the Saudi Industrial Development Fund (SIDF) and 23 local and international lenders engaged in this transaction securing a total of
Air Products Chairman, President and CEO, Seifi Ghasemi, said: "We are very proud to announce the finalization of the definitive agreements for this complex transaction and now move forward. This is a perfect fit with our growth strategy. It is a value-creating investment for Air Products and leverages our core syngas purification and industrial gas production capabilities. Most importantly, it is a privilege to further strengthen our relationship with Aramco, the world's largest company, and to partner with ACWA Power and Qudra Energy in this megaproject, which supports the Kingdom's Vision 2030 and building partnerships for mutual growth."
Mohammad Abunayyan, Chairman of ACWA Power, said: "The successful financial agreement concluded today is the largest agreement of its kind in ACWA Power's history and highlights our continued firm commitment to the Kingdom's Vision 2030 and its strategic goals for the energy sector. A monumental shift is underway in Saudi Arabia's energy sector, and we are proud of our partnership and close collaboration with Aramco and Air Products towards diversifying the energy mix and increasing the efficiency of the sector. Drawing on the pioneering expertise and capabilities of all joint venture partners, Jazan IGCC is set to be the largest integrated project for gasification and combined cycle energy production in the world. Bringing the most advanced technologies to the Kingdom, the Jazan project will push the boundaries. We are also exceptionally proud to add to ACWA Power's track record in training and upskilling Saudi talent to meet the requirements of the sector."
-ENDS-
About Aramco
Aramco is a global integrated energy and chemicals company. We are driven by the core belief that energy is opportunity. From producing approximately one in every eight barrels of the world's oil supply to developing new energy technologies, our global team is dedicated to creating impact in all that we do. We focus on making our resources more dependable, more sustainable and more useful. This helps promote stability and long-term growth around the world. www.aramco.com
Twitter Aramco
About Air Products
Air Products (NYSE:APD) is a world-leading industrial gases company in operation for 80 years. Focused on serving energy, environment and emerging markets, the Company provides essential industrial gases, related equipment and applications expertise to customers in dozens of industries, including refining, chemical, metals, electronics, manufacturing, and food and beverage. Air Products is also the global leader in the supply of liquefied natural gas process technology and equipment. The Company develops, engineers, builds, owns and operates some of the world's largest industrial gas projects, including: gasification projects that sustainably convert abundant natural resources into syngas for the production of high-value power, fuels and chemicals; carbon capture projects; and world-scale carbon-free hydrogen projects supporting global transportation and the energy transition.
The Company had fiscal 2020 sales of
About ACWA Power
ACWA Power is a developer, investor and operator of power generation, desalinated water and green hydrogen production plants. Registered and established in 2004 in Riyadh, Saudi Arabia; ACWA Power employs about 3,500 people and is currently present in 13 countries in the Middle East, Africa, Central Asia and Southeast Asia. ACWA Power's portfolio includes 64 assets with an investment value of SAR 248 billion (USD 66.1 billion), producing 41.6 GW of power and 6.4 million m3/day of desalinated water delivered on a bulk basis to address the needs of state utilities and industries on long term, off-taker contracts under utility services outsourcing and Public-Private-Partnership models.
ACWA Power's mission is to reliably and responsibly deliver electricity and desalinated water at a low cost, thereby contributing effectively to the sustainable, social and economic development of communities and countries. ACWA Power is committed to the values of Safety, People and Performance in operating its business across all geographies. For more information, please visit www.acwapower.com.
Disclaimer
The press release contains forward-looking statements. All statements other than statements relating to historical or current facts included in the press release are forward-looking statements. Forward-looking statements give each Companies' current expectations and projections. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "estimate," "plan," "project," "can have," "likely," "should," "could," and other words and terms of similar meaning or the negative thereof. Such forward looking statements involve known and unknown risks, uncertainties and other important factors beyond each Company's control that could cause such Company's actual results, performance or achievements to be materially different from the expected results, performance, or achievements expressed or implied by such forward looking statements. For a list of risks and uncertainties that could cause actual results to differ from the forward looking statements in this press release, these each Company's latest periodic reports filed with the relevant authority. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it will operate in the future.
The information contained in the press release, including but not limited to forward-looking statements, applies only as of the date of this press release and is not intended to give any assurances as to future results. The Companies expressly disclaim any obligation or undertaking to disseminate any updates or revisions to the press release, including any financial data or forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law or regulation. No person should construe the press release as financial, tax or investment advice.
View original content:SOURCE Air Products
FAQ
What is the purpose of the Air Products joint venture in Jazan?
What is Air Products' stake in the Jazan joint venture?
When is the asset transfer for the Air Products joint venture expected to occur?
How much financing has been secured for the Air Products project in Jazan?
What impact will the Jazan project have on Air Products' growth strategy?
