Riyadh – Mubasher: State-run Saudi Aramco has signed an agreement with ACWA Power and US-based Air Products to implement an $8 billion gasification and power joint venture in Saudi Arabia.

Set to be located in the oil-rich kingdom’s Jazan Economic City, the new entity will purchase gasification assets, power block and associated utilities from Aramco for about $8 billion, according to the companies’ joint statement.

The assets, currently under construction and expected to be completed by 2019, will be transferred to the joint venture upon start-up. Air Products will hold at least 55% of the joint venture, with Aramco and ACWA are to own the remaining stake.

Scheduled to add 400,000 barrels per day (bpd) of refining capacity, the new venture will feed Aramco’s Jazan refinery and terminal on the Red Sea coast. The project is set to process medium and heavy crude oil to produce liquefied petroleum gas (LPG), sulfur and other fuel products.

Aramco senior vice president of downstream Abdulaziz M. Al-Judaimi said that the new 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.”

Aramco will provide the feedstock, while the joint venture, that will operate the facility for a 25-year period at a fixed monthly fee, will produce power, hydrogen and other utilities for the world's largest oil producer.