The Saudi Arabian oil company, Saudi Aramco has reportedly signed an agreement with the US-based industrial gas and chemical supplier, Air Products and Saudi’s ACWA Power. As per sources, the agreement will result in the formation of a power and gasification joint venture in Saudi Arabia worth USD 8 billion.

According to an official statement, the new JV will be located in state-owned Jazan Economic City, and will acquire power blocks, gasification assets, and associated utilities from the state-owned Aramco. Further, Air Products would hold at least 55% stake in the joint venture while the remaining stakes would be owned by ACWA and Aramco, claim sources.

As per The National, the joint venture will serve Jazan refinery of Aramco and terminal on the Red Sea coast. This project would develop Saudi’s industrial zones, attract foreign investors, and eventually create job opportunities. Aramco’s refinery, with a 400,000 barrels per day capacity would also process medium and heavy crude oils to manufacture liquefied petroleum gas, paraxylene, sulfur, asphalt, and other products.

Aramco’s senior VP of Downstream, Abdulaziz M. Al-Judaimi stated that the JV is expected to enhance the overall value of their refinery as well as the value of its integrated gasification combined power plant. Abdulaziz further added that their company expects the joint venture to eventually transform the province by positioning Jazan Economic City as a potential location for foreign and private investors.

Reports suggest that the joint venture will operate the refinery facility for a period of 25 years with a fixed monthly fee. In addition, Aramco would provide its feedstocks to the joint venture to generate power, hydrogen, and other utilities for Aramco.

Sources familiar with this matter state that the assets are currently under construction and will be transferred to the joint venture upon completion in 2019.