Riyadh- Saudi oil-giant Aramco signed a shareholder agreement with Lamprell plc “Lamprell”, the National Shipping Company of Saudi Arabia “Bahri”, and Hyundai Heavy Industries Co. Ltd “HHI” , entering a joint-venture partnership.
Building the region’s biggest shipyard in joint venture with South Korea’s Hyundai Heavy Industries, the Aramco initiative is estimated to be worth a dashing $5.2 billion.
Aramco, which announced a memorandum of understanding for the project in January 2016, gave no financial details of the joint venture. But it has previously said the project will cost over 20 billion riyals.
The signed deal covers the establishment, development and operation of a world-class shipment yard. It is considered a core project to the King Salman International Complex for Maritime Industries and Services located in Ras Al-Khair, near Jubail Industrial City on the Kingdom’s east coast, said the Saudi Press Agency (SPA).
This strategic partnership among leading companies is set out to profit from the rapidly-growing maritime demands in the region by offering globally competitive, safe, high quality and on-time solutions to customers.
Works on the localization of Saudi Aramco’s supply chain related to offshore drilling and shipping activities, the initiative is expected to optimize costs, improve rapid responses between Saudi Aramco and affiliates.
The 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.
“The integrated maritime yard will be the largest in the region in terms of production capacity and scale,” Saudi Aramco said.
It also enables Aramco and its supply chain partners to meet manufacturing, maintenance, and repair and overhaul requirements for offshore oil and gas rigs, offshore support vessels, and commercial vessels, including Very Large Crude Carriers (VLCC).
The new facility provides capacity to manufacture 4 offshore rigs, over 40 vessels including 3 VLCCs, and service over 260 maritime products annually.
“Major production operations are expected to commence in 2019,” with full capacity reached by 2022, Aramco said.
Major production operations are expected to start in 2019 with the facility reaching its full production capacity by 2022. This initiative will also contribute towards localizing expertise related to the maritime industry and job creation in the Kingdom.
Saudi Arabia has launched a program to diversify its industrial base after its revenues were badly hit by a 50 percent fall in world oil prices since 2014.