Aramco signed a joint venture agreement with three firms to build and operate a maritime yard on the kingdom's east coast, it said on Wednesday as the state oil giant pushes ahead with the government's plans to diversify the country’s economy away from oil.
A shareholder agreement was signed with National Shipping Co of Saudi Arabia (Bahri), a state-controlled firm which ships oil for Aramco, as well as London-listed Lamprell Plc, a United Arab Emirates-based rig builder and engineering firm, and South Korea's Hyundai Heavy Industries Co, according to a statement by Aramco.
The shipyard, by which the JV aims to capitalize on the growing regional maritime industry, will be the anchor project within the King Salman International Complex for Maritime Industries and Services located in Ras Al-Khair, near the Jubail Industrial City on the Kingdom’s east coast.
Aramco, which announced a memorandum of understanding for the project in January 2016, had previously said the project would cost over 20 billion riyals ($5.3 billion), but did not give an updated figure.
The new JV localises essential links of Saudi Aramco’s supply chain related to offshore drilling and shipping activities, which will lead to optimised cost, reduced response times and improved agility for Saudi Aramco and its affiliates, the company said.
“The integrated maritime yard will be the largest in the region in terms of production capacity and scale, providing an unprecedented mix of products and services in the region and enabling Saudi Aramco and its supply chain partners to meet their manufacturing, maintenance, repair and overhaul requirements for offshore oil and gas rigs, offshore support vessels, and commercial vessels, including Very Large Crude Carriers (VLCC), Aramco said.
The new facility will have the capacity to manufacture four offshore rigs, over 40 vessels including three VLCCs, and service over 260 maritime products annually. Major production operations are expected to commence in 2019 with the facility reaching its full production capacity by 2022. This initiative will also contribute towards localising expertise related to the maritime industry and job creation in the Kingdom.