A consortium consisting of Saudi Aramco and three other partners – Air Products, ACWA Power and Air Products Qudra- has finalized acquisition and project financing agreements for a $12 billion project that will produce hydrogen and power, Al Arabiya reports.
The ASU (air separation unit) gasification joint venture- first announced in 2018- in the Saudi Arabia’s southern city of Jazan Economic City should increase job opportunities and transfer to the Kingdom the most advanced technologies in the field, allowing for the first time Saudi talent to employ the technology.
The project agreements are signed as the world’s biggest oil exporter forges ahead with clean energy Saudi Aramco has a 20% share in the joint venture via its subsidiary Saudi Aramco Power Company (SAPCO).
The joint venture will use Aramco’s crude oil to produce power steam, hydrogen and other utilities. The unit, in return, will serve Aramco’s Jazan Refinery, which processes 400,000 bpd crude oil and produces ultra-light sulphur diesel and gasoline, among other products.
US-based Air Products is the largest investor with 46% share followed by Riyadh-based ACWA Power with 25% share and Air Products Qudra- a joint venture between Air Products and Saudi renewables company Qudra Energy started in 2017 in Riyadh – with 9% share in the joint venture with asset transfer and funding under the joint venture expected to occur in October 2021.
According to the statement, the joint venture owns and operates the unit under a 25-year contract for a fixed monthly fee, purchasing the ASUs, gasification, syngas cleanup, utilities and power assets from Aramco.
Aramco’s senior VP of downstream, Mohammed al-Qahtani, believes the joint venture will increase the overall value of the refinery and integrated gasification combined cycle power plant, positioning at the same time Jazan Economic City for additional foreign investment and involvement of the private sector.
Aramco’s hopes, according to its chief technology officer Ahmed al-Khowaiter, is to have enough hydrogen market demand by 2030 for the company to cater to it on a world scale with the target volume of hydrogen it will be able to produce by then.
In July 2020 Neom, Saudi Arabia’s planned zero-carbon city, formed a joint venture with ACWA Power and Air Products to create a $5 billion green hydrogen project. The plan envisages production of 1.2 million mt/year of ammonia within the project by 2025.
As part of Saudi flagship Vision 2030 project, Neom city will diversify the economy away from oil with the industrial giants like Aramco, SABIC and Maaden using Neom’s hydrogen from to produce clean fuels, fertilizers and petrochemicals.
Saudi Aramco made the world’s first blue ammonia shipment in September 2020 from Saudi Arabia to Japan, for use in power generation.