Construction work has started at the Saudi Aramco joint venture shipyard in eastern Saudi Arabia after the JV company International Maritime Industries (IMI) entered into a loan with Saudi Industrial Development Fund (SIDF), Lamprell said.
The SIDF agreed in principle last year to provide 3.75 billion riyals ($1 billion) in financing for the project, which Aramco has said will cost more than 20 billion riyals ($5.3 billion).
IMI is a partnership between United Arab Emirates-based rig builder Lamprell, state oil giant Saudi Aramco, National Shipping Co of Saudi Arabia (Bahri) and South Korea’s Hyundai Heavy Industries Co.
Each partner is contributing capital according to a pro-rate share in line with the original drawdown schedule. Lamprell said its first tranche amounted to US$20 million which was invested in 2017, and will be used to pay for initial start-up costs of the business including staff hire and long lead item procurement. Lamprell's anticipated total equity contribution over the construction period is up to $140 million.
In addition to the significant investment made by the Saudi government in the facility's infrastructure and by the partners, the loan agreement is expected be a cornerstone for the success of the IMI yard, Lamprell said in a statement.
Currently, the construction process at the site is under way with dredging and associated activities in progress, Lamprell said. The partners have made significant progress in creating the business infrastructure, including the management organisation, the internal governance structure and the detailed business plan.
Meanwhile, ARO Drilling is expected to order 20 jackup rigs from the IMI yard over the next ten years. Prior to the jackup rig construction zone of the maritime yard becoming operational, significant component parts of the first two rigs are expected to be subcontracted to Lamprell's UAE facilities.
ARO Drilling and the IMI also recently selected the LJ43 rig design collaboratively developed by Lamprell and GustoMSC, which builds mobile offshore units and associated equipment.
The nearly 12 million square-meter facility is planned to have an annual capacity to manufacture four offshore rigs and over 40 vessels, including three Very Large Crude Carriers (VLCCs), and service over 260 maritime products.