King Salman looks at a model of the King Abdulaziz Centre for World Culture.
The bigger picture
01 January 2017
The opening of two huge petrochemical projects, a cultural centre and the kick-off of a maritime complex herald growing opportunities for Saudi Arabia’s Eastern region.
Saudi Arabia’s Eastern Province is poised for a quantum leap in industrial activity, following the recent inauguration of two mega projects in Jubail by King Salman bin Abdulaziz Al Saud. These include the giant Sadara project – the largest integrated chemical complex in the world to be built in one phase – and Saudi Aramco Total Refining and Petrochemical Company (Satorp) facilities.
In addition, the Custodian of the Two Holy Mosques laid the foundation stone for the King Salman International Complex for Maritime Industries and Services in Ras Al Khair.
Apart from these projects, more than 100 companies inaugurated by the Royal Commission for Jubail and Yanbu and new projects inaugurated by Saudi Basic Industries Corporation (Sabic) — demonstrate the close alignment of Saudi Aramco’s strategic business goals with the kingdom’s ambition for development, as spelled out in Saudi Vision 2030.
King Salman also visited Saudi Aramco headquarters in Dhahran in late November to inaugurate the King Abdulaziz Centre for World Culture and five oil and gas projects: Wasit Gas Plant, Manifa oil field, Shaybah natural gas liquids, Shaybah oil increment, and Khurais oil increment projects.
The Sadara and Satorp facilities are among the largest in the refining and petrochemicals industries that support the objectives of Saudi Vision 2030. Both facilities are the result of successful partnerships between Saudi Aramco and two leading global companies, The Dow Chemical Company and Total.
The projects are aligned with the aim to create new industries that will help provide new job opportunities for Saudis, as well as attract foreign investment to the kingdom.
The project has already been attracting investment with the latest being the Saudi-based Rufayah Chemicals Company (RCC), which has signed up with Sadara Chemical Company to set up one of the largest hydrocarbon resin plants in the world at an investment of $500 million (see page 68).
Khalid Al Falih, Saudi Arabia’s Minister of Energy, Industry and Mineral Resources and Saudi Aramco chairman, commented that Sadara and Satorp are major drivers in “achieving our goals of greater integration and value addition”.
Sadara
The Sadara project is a joint venture between Saudi Aramco and The Dow Chemical Company in Jubail Industrial City. Comprising 26 world-scale manufacturing units, the Sadara complex is the world’s largest to be built in a single phase and involves an investment of $20 billion.
The first phase commenced operations in 2015, and the remaining operating units were scheduled for completion by the end of 2016. The production capacity is more than three million tonnes of various plastics and chemicals product annually.
By the time the Sadara complex is complete, more than 160,000 tonnes of steel will have been used in its construction; 1 million cu ft of concrete will have been poured (enough to build the equivalent of three King Fahd causeways to Bahrain); and about 2,500 km of pipe will have been laid (enough to stretch from Jubail to Jeddah twice over).
Amin Nasser, president and CEO of Saudi Aramco, said: “The Sadara project contributes to the development of the manufacturing and the technology industries in the kingdom, and will have a great impact on the economy, directly and indirectly.”
Sadara is the first chemicals complex in the GCC region that uses naphtha as feedstock. The complex has a unit to crack naphtha that can process 85 million sq ft of ethane and 53,000 barrels per day of naphtha as feedstock to produce three million tonnes of high value and high performance plastics annually.
Sadara and the Royal Commission for Jubail and Yanbu collaborated to establish PlasChem Park as a world-class industrial park for chemical and conversion industries. The 12-sq-km site in Jubail’s Second Industrial City is located next to Sadara’s new manufacturing complex and will be devoted exclusively to chemical and conversion industries that make direct or indirect use of Sadara’s products and raw materials from other suppliers. The site will consist of two main sections: the Chemical Park, and the Conversion Park.
A number of investors have already signed agreements for PlasChem Park, the latest being Rufayah Chemicals Company. Other deals inked include an ethylene oxide and propylene oxide supply agreement with Energy Chemical Sources Company (a joint venture between Halliburton and Taqa), to produce oilfield chemicals for the oil and gas industry and two supply agreements with E A Juffali and Brothers – the first for methylene diphenyl diisocyanate (MDI) for use in polyurethane system house applications, and the second for the supply of butyl tri-glycol ether for use in the production of brake fluids and other specialty chemical products.
Satorp
Satorp, a joint venture between Saudi Aramco and Total in Jubail, will support Saudi Aramco’s efforts to expand the value chain and achieve maximum value from the kingdom’s resources. It can process 400,000 barrels of heavy Arabian crude daily into low-sulphur gasoline, diesel and jets fuel that comply with US, European and Japanese standards. It also produces more than one million tonnes of paraxylene, benzene, sulphur and pure petroleum coke that fuels cement plants and electric power stations.
The joint venture will create approximately 5,700 new direct and indirect jobs and will serve Saudi Aramco’s vision to become among the world’s top three refiners. The venture showcases the positive impact of foreign direct investments on the Saudi Arabia’s economy.
The scale of the Satorp project and the engineering that went into its construction can be gauged from the amount of material used. These include 1 million km of electrical cables, 80,000 tonnes of steel, 147,000 tonnes of pipe, and 4,500 pieces of equipment and heavy tools used in the construction; and 45,000 workers at the peak of construction, with 80 per cent of the work performed by local subcontractors with a Saudisation rate of 65 per cent.
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King Salman International Complex. |
Maritime Complex
The King Salman International Complex for Maritime Industries and Services in Ras Al Khair is a commercial maritime project that complements the growth of the Saudi energy industry and helps to meet the development, localisation, and diversification objectives outlined by Saudi Vision 2030.
It will also position the kingdom as a technological centre with top global expertise in the field of marine engineering and construction in the region. The complex will become a platform for integrated industries through the establishment of major development projects, and will help attract domestic and foreign investments as well as new business projects.
Ras Al Khair, established by the Saudi company Ma’aden, is home to a large number of mining facilities such as aluminium and bauxite factories, and other industries. It lies about 90 km to the north of Jubail Industrial City, a location that gives it a strategic and logistical advantage because of its proximity to oil and gas production and shipping facilities in the Eastern Province.
The development of the complex will start with a maritime yard as an anchor project to be completed in 2020. It will be managed and maintained by Saudi Aramco’s joint venture with Lamprell, National Shipping Company of Saudi Arabia (Bahri), and Hyundai Heavy Industries.
The facility will offer quality, efficiency, and economies of scale, and when completed, it will offer vessel and rig build, maintenance, repair, and overhaul services in addition to a full suite of design and financial services to customers. The project will comply with all governmental environmental and sustainability requirements. It will also include support facilities and services such as centralised offices for employees and a residential camp with recreational facilities, four zones for the manufacturing and maintenance of ships and offshore platforms and drilling equipment.
The complex will cover an area of 5 sq km, extending for 4 km along the coast of Ras Al Khair.
Of the four operating zones, which include several dry docks and over 15 piers and wharfs of various types, Zone One is dedicated to the repair and maintenance of ships and rigs, and includes maintenance dry docks and 12 berths, in addition to workshops fully equipped for all maintenance and overhaul operations, with the capacity to service more than 15 rigs and 130 ships annually, and to repair VLCCs.
The second zone, dedicated to offshore support vessels, will have the capacity to build 25 ships and repair 115 offshore support vessels a year, and will consist of nine berths and fully-equipped ship repair workshops. The third zone has the largest area and is dedicated to the construction of commercial vessels. Composed of VLCC-size dry docks and fully-equipped berths, this zone will have the capacity to build all types of ships using state-of-the-art manufacturing techniques. It will have the capacity to build three VLCCs and 15 commercial vessels of different types annually.
The fourth, the maritime operations zone, will have the capacity to build more than 11 fixed offshore platforms and four drilling rigs each year. It will include a floating dock for loading of newly constructed rigs and will have a loading capacity across the quay walls of nearly 10,000 tonnes.
The complex is expected to begin initial production in November 2018, followed by operation of the rig equipment area in February 2019, the shipbuilding area in 2020, and the maintenance and overhaul area in 2021, with full production capacity to be reached by 2022.
By 2030, the complex is targeted to contribute more than $17 billion to Saudi Arabia’s GDP per year, reduce maritime-related imports by $12 billion, and create more than 80,000 job opportunities.
Al Falih remarked: “The King Salman International Maritime Complex marks a groundbreaking example of well-studied efforts toward the diversification of economy. Such diversification is achieved by investing all available resources in the kingdom and opening doors for strategic industries to operate and flourish.
“The kingdom continues to support an develop the mining sector under competitive conditions, combining innovation and excellence, while pumping huge investments of over SR130 billion ($34.6 billion) to establish an infrastructure of trains, ports, gas supplies, power, water, sulfur, phosphate, and aluminium plants tied to the mining industry established by the Ma’aden Company.”
Nasser said: “Ras Al Khair will be a dynamic industrial stronghold in the kingdom, incubating various industries. The project will help increase economic diversification and enhance the localisation of the energy industry, with Saudi Aramco endeavouring to double the percentage of local content in commodities and services produced in the kingdom, to reach 70 per cent by 2021.”
The maritime complex is one of the initiatives undertaken by Saudi Aramco to achieve a quantum leap in the comprehensive National Transformation Plan.
Cultural Centre
The King Abdulaziz Centre for World Culture is the first institution of its kind in the kingdom, bringing together multiple offerings under one roof that are designed to build local talent in the knowledge, cultural and creative industries.
Blending iconic architectural design with advanced technology, and unique learning methods with enriching programmes, the centre aims to provide inspiring platform for explorers, learners, creators, and leaders. The centre is due to open in the second half of 2017 to the public.
Al Falih comments: “Saudi Vision 2030 focuses on promoting the kingdom’s leadership not only in the fields of energy, industry, and economy, but also in science, technology and culture. The King Abdulaziz Centre for World Culture will be a major breakthrough in knowledge and development, with a core objective to promote creativity in the kingdom and build bridges with other cultures.”
Meanwhile, the five oil and gas projects inaugurated in Saudi Aramco’s Oil Supply Planning and Scheduling (Ospas) facility will enhance the kingdom’s crude production and processing capability and make more gas available for power and manufacturing. The projects are also an integral step toward meeting the increasing domestic demand for energy and chemicals, and building gas production that increases the use of efficient, cleaner-burning fuel.
