Local developer Acwa Power has signed an agreement with Saudi Aramco and US-based Air Products to form a gasification and power joint venture (JV) worth more than $8bn.

The JV will be located at Jazan Economic City (JEC) in the southwest area of the kingdom.

The JV will purchase gasification assets, power block and associated utilities from Saudi Aramco for an estimated $8bn-plus. The assets are currently under construction, and will be transferred to the JV following commissioning, which is expected in 2019.

The international consortium will own and operate the facility under a 25-year contract for a fixed monthly fee. Saudi Aramco will supply feedstock for the JV, and the JV will produce power and hydrogen for the oil major. Air Products will own at least 55 per cent of the JV, with Saudi Aramco and Acwa Power owning the remaining shares.

The JV’s produced utilities will serve Aramco’s Jizan Refinery and terminal, a megaproject which will process heavy and medium crude and add 400,000 barrels a day of refining capacity. The power plant will have a capacity of about 2,400MW.

MEED reported in August 2016 that Aramco was considering transferring the under-construction Jizan power plant as an IPP.

Aramco awarded China’s Sepco the engineering, procurement and construction (EPC) contract to build and commission the Jizan integrated gasification combined-cycle (IGCC) power plant contract in 2014. The oil major had previously awarded Germany’s Siemens a contract to provide gas turbines, generators and heat steam generators.