Aramco's Q2/H1 2023 report identified Jazan Integrated Gasification and Power Company (JIGPC) as one of the key factors affecting the company’s financial results.
According to the report, Aramco received SAR15.6 billion ($4.2 billion) in January 2023 related to the financing arrangement with the JIGPC. This is the second of the three payments that Aramco is to receive as a result of this transaction that was completed in October 2021.
It will receive the remaining SAR2.0 billion ($0.5 billion) received by the yearend.
The total amount under the arrangement is repayable in monthly installments, commencing from October 2021 to October 2046.
JIGPC is a joint venture (JV) of Saudi Aramco, Air Products, Air Products Qudra and ACWA Power.
According to Aramco’s 2022 Annual report, the company entered into a financing arrangement with the JV in 2021 related to the Jazan Integrated Gasification Combined-Cycle (IGCC) power plant, an air separation unit (ASU) and ancillary assets.
The transaction led to the creation of the JIGPC, a limited liability company, with Saudi Aramco Power Company (SAPCO), a wholly owned subsidiary of Aramco owning 20 per cent, while Air Products, ACWA Power and Air Products Qudra own 46 per cent, 25 per cent and 9 per cent, respectively. The total proceeds of the transaction was SAR44,063 million ($11.75 billion).
Upon closing, Aramco recognised an amount of SAR21,226 million ($5.66 billion), representing the amount due to the other JIGPC shareholders, with regard to the first tranche of SAR26,532 million under the financing arrangement.
The JIGPC joint venture was formed when the companies in 2018 companies came together to plan a gasification and power company at Jazan Economic City (JEC) in Saudi Arabia for a total cost of $12 billion.
It was decided that the JV would own and operate the facility under a 25-year contract under a public private partnership (PPP) model. Furthermore, it was agreed that the JV would purchase the gasification assets, power block and the associated utilities from Saudi Aramco for approximately over $8 billion.
The JIGPC site is recognised as the world’s largest integrated gasification combined cycle (IGCC) complex, employing gasification technology for the first time in the Kingdom of Saudi Arabia.
It will serve Saudi Aramco’s Jazan Refinery and terminal at JEC, a megaproject that will process heavy and medium crude oil to create liquefied petroleum gas, sulfur, asphalt, benzene and paraxylene, and add 400,000 barrels per day of refining capacity.
The Jazan Refinery supplies feedstock to JIGPC and, in turn, JIGPC produces and provides power, hydrogen, steam, and other utilities to Saudi Aramco amounting to:
• Gross power of 3.8 GW and net output power of 2.6 GW with 1.2 GW for internal consumption.
• Hydrogen worth 184,000 Nm3/hr.
• Steam worth 580 MT/hr.
Aramco has a commercial agreement with Saudi Electric Company (SEC) to sell the excess power which is generated by JIGPC.
The consortium will increase job opportunities and transfer the most advanced technologies in this field to the Kingdom, and enable Saudi talent to employ this technology for the first time.