Global law firm White & Case LLP and the Law Office of Megren M. Al-Shaalan (LOMAS) have advised the Saudi Arabian Oil Company (Saudi Aramco) on the closing of the US$12 billion hybrid acquisition, development and financing of a world-scale Integrated Gasification and Combined Cycle (IGCC) project in the Jazan Economic City, Kingdom of Saudi Arabia.
"This is an extremely bespoke and innovative transaction, which we have advised our long-standing client Saudi Aramco on since the early high level structuring stages," said White & Case partner Antoine Cousin, who led the Firm's deal team. "Our cross-border and cross-practice team advised on all key joint venture, acquisition, project development, financing, construction, licensing and antitrust aspects of the transaction, operating seamlessly to bring real value to our client. The Jazan project is set to be the largest complex of its kind worldwide and is the latest example of White & Case's successful involvement in the transformation of the Saudi Arabian economy and its positioning for foreign investment and private sector involvement."
The transaction is structured around Saudi Aramco's sale of the world's largest complex of its kind (comprising of gasification blocks, gas turbine power blocks that will produce up to 3.8 GW of power, an air separation unit and other ancillary assets) to a special-purpose joint venture (JV) entity, for a purchase price of approximately US$12 billion. A partnership of Air Products and ACWA Power holds a majority interest in the JV, with Saudi Aramco retaining a minority interest via its subsidiary, Saudi Aramco Power Company (SAPCO).
The JV secured a US$7.2 billion financing from the Saudi Industrial Development Fund (SIDF) and 23 regional and international lenders, and the first group of IGCC assets has now been transferred from Saudi Aramco to the JV.
The JV will own and operate the assets under a 25-year long-term offtake contract with Saudi Aramco. Saudi Aramco will supply feedstock to the JV, and the JV will produce power, steam, hydrogen and other utilities. These offtake products will primarily serve Saudi Aramco's adjacent Jazan Refinery Complex – a megaproject that will process 400,000 barrels per day of crude oil to produce products such as ultra-light sulphur diesel and gasoline.
White & Case partner Carina Radford, who led the financing, said: "Working with the Saudi Aramco team to help create a successful US$12 billion financing package alongside the parallel development of the investment and offtake structure was a unique opportunity. It required very close collaboration across the commercial and finance terms to ensure a real focus on core bankability aspects as the transaction structure was emerging, as well as a real understanding of the drivers of the international and regional bank markets."
The White & Case and LOMAS team that advised on the transaction was led by partners Antoine Cousin (Abu Dhabi), Carina Radford (London), Adam Pierson, Ibaad Hakim (both Abu Dhabi) and Ivan Paskal (Dubai) and included partners Megren Al-Shaalan (LOMAS, Riyadh), Jacquelyn MacLennan (Brussels) and Strati Sakellariou-Witt (Brussels), counsel Habeeb Rahman (Abu Dhabi) and associates Joshua Cohen, Sarah Hudson, Fergus Langstaff, Patrick Burrows (all Abu Dhabi), Sara Nehring, Josephine Levick (London) and Waad Alkurini (LOMAS, Riyadh).
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