Aug. 13–UPPER MACUNGIE TOWNSHIP — Air Products has signed an $8 billion joint production venture in Saudi Arabia.
The Trexlertown industrial gas giant announced the deal Sunday in a news release with two Saudi Arabian firms — energy and chemicals company Saudi Aramco and ACWA Power, a developer and operator of power and water plants. Air Products plans a conference call at 8:30 a.m. Monday to elaborate.
The venture, which will serve Saudi Aramco’sJazan Refinery and terminal at Jazan, is a large gasification and power project that will process heavy and medium crude oil to create liquefied petroleum gas, sulfur and other products, and add 400,000 barrels per day of refining capacity. Gasification is a more environmentally friendly way of converting a raw material into fuel, chemicals and fertilizers compared with burning it.
The joint venture will purchase the gasification assets, power and associated utilities from Saudi Aramco for more than $8 billion, according to the release. The assets are considered “under construction” and would be transferred to the joint venture upon startup, which is scheduled to occur in 2019.
CEO Seifi Ghasemi said the new project builds on trust created between Air Products and Saudi Aramco, which in 2015 awarded the Lehigh Valley Fortune 500 company a part in a $2.1 billion air separation unit. Company spokesman Art George said the $8 billion transaction is separate from the earlier deal.
Ghasemi said in the release the new project will allow Air Products to move toward an “expanded scope of supply” at Jazan.
“Air Products is very honored to be given this outstanding opportunity to expand our involvement in this mega-project in partnership with Saudi Aramco, the world’s largest company, and ACWA Power, the leading private power producer in the Middle East,” said Ghasemi, who is also Air Products chairman and president.
Last month, Ghasemi and other executives said Air Products would likely spend about $7 billion on larger-scale energy, environmental and emerging market projects, as part of how the company plans to spend at least $15 billion over the next five years in capital work.
Sunday’s news release did not specify whether the joint venture would lead to more jobs at Air Products, which recently announced plans to build a new corporate headquarters in Trexlertown, Upper Macungie Township, about 1 mile east of its existing Hamilton Boulevard campus. Air Products, which earned net income of $1.1 billion in its last fiscal year on $8.2 billion in sales, employs about 2,250 people in the region and has about 15,000 employees worldwide.
Air Products will own at least 55 percent of the joint venture, according to the news release. The companies will own and operate the facility under a 25-year contract.
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