Saudi Aramco pens dredging deal for giant maritime complex

Oil giant Saudi Aramco has signed contracts that will mark the start of works on what is going to be the giant maritime complex known as King Salman International Complex for Maritime Industries and Services in Ras Al-Khair.

The company signed a contract with a consortium comprising Saudi Archirodon Company Ltd and Huta Hegerfeld AG Saudia Company for dredging, reclamation and marine structures for the huge project.

The contract is the first major undertaking for the maritime complex where contractors will conduct dredging and reclamation of approximately 37 million cubic meters of fill, in addition to ground improvement over an area of 7.4 million square meters. The contract will also provide for constructing 4,500 linear meters of concrete quay walls and wharves, in addition to 12,000 linear meters of rock revetments and breakwaters to protect the integrity of the complex, Saudi Aramco said.

“It is an important milestone for King Salman International Complex for Maritime Industries and Services, the largest of its kind in the region.” said Ahmed Al-Sa’adi, Saudi Aramco’s Senior Vice President for Technical Services. “The Complex is in line with the Kingdom’s economic diversification objectives, it will position the Kingdom as a strategic logistics hub and will create vast job opportunities.”

Execution of the initial phase of the contract will be completed by 2020. It is instrumental for the whole program as it will prepare the project’s land for subsequent construction of a dry dock and ship building and maintenance facilities, the oil company said-

The complex was inaugurated in November 2016. When completed, it will offer vessel and rig construction, maintenance, repair and overhaul services.

Twenty jack-up rigs

Offshore Energy Today in May reported that four companies had teamed up to build an offshore services section at the complex.

At the time, offshore rig builder Lamprell said it had entered into a joint venture (JVCo) with Saudi Aramco Development Company, Bahri and Hyundai Heavy Industries to establish a maritime yard for the construction, maintenance and repair of offshore drilling rigs and vessels, as part of the giant complex in the eastern province of the Kingdom of Saudi Arabia.

The story of the proposed joint venture is not new, as this has been proposed earlier, but it is now firming up, and the joint venture will come to life subject to approvals of respective shareholders.

According to Lamprell, once fully built, the yard will be the largest in the Arabian Gulf in terms of production capacity and scale. The yard is expected to be partially operational by 2019 and fully operational by 2022.

It will have the capacity to build four offshore rigs, over 40 vessels including 3 VLCCs, and service over 260 maritime products, annually.

Under the agreement, Lamprell will invest up to a maximum of $140 million will hold 20 per cent of of JVCo’s issued share. Saudi oil company Saudi Aramco will invest up to a maximum of $350.7 million, Bahri will invest up to a maximum $139.3 million, and HHI to invest up to a maximum $70.0 million. The latter three will hold 50.1 per cent., 19.9 per cent and 10.0 per cent of JVCo’s issued share capital, respectively subject to the terms of the Shareholders’ Agreement.

As part of the deal, Saudi Aramco will enter into a master offtake agreement with JVCo under which it will agree to purchase, or procure the purchase, from JVCo of a minimum of 20 jack-up drilling rigs (equating to two rigs per year for 10 years based on the prevailing and competitive market prices), as well as offshore support vessels and MRO services for jack-up drilling rigs and offshore support vessels operating on Saudi Arabian Oil Company’s offshore assets.

Bahri, the Saudi national shipping company, will enter an offtake agreement with JVCo under which Bahri will agree to purchase from JVCo no less than 75 per cent of its commercial vessel requirements over ten years, being a minimum of 52 commercial vessels (including a significant number of VLCCs), and MRO services for such vessels based on the prevailing and competitive market prices, subject to certain conditions.