Saudi Aramco has signed a land lease agreement with McDermott Arabia Company for the establishment of a fabrication facility located within the King Salman International Complex for Maritime Industries in the Ras Al Khair region of Saudi Arabia.

McDermott Arabia Company is a wholly-owned subsidiary of McDermott International, a fully integrated provider of technology, engineering and construction solutions to the energy industry.

This is pursuant to a memorandum of understanding (MoU) signed between Saudi Aramco and McDermott earlier, said a statement from the company.

The new facility will be used for large scale fabrication of offshore platforms and onshore/offshore modules. To further enhance project execution capabilities in Saudi Arabia, McDermott will also expand its in-country engineering and procurement offices, as well as establish a new marine base in the Eastern Province to support installation of offshore platforms, subsea pipelines and cables, skids, and associated structures and assemblies.

“This facility will serve as a major engineering, procurement, construction, and installation (EPCI) hub for not only the kingdom, but for the GCC region,” said Ahmad Al Sa’adi, senior vice president of technical services at Saudi Aramco.

“Having this facility with International Maritime Industries (IMI) in the King Salman International Complex for Maritime Industries offers an integrated portfolio of maritime products and services,” said Mohammad Al Assaf, vice president of new business development at Saudi Aramco.

“The localisation of these capabilities will contribute to diversifying the economy, create almost 7000 jobs, and achieve a target of 60 per cent Saudization by 2030,” Al Assaf added.

The new facility in Ras Al Khair will be located near the Jubail Industrial City on the kingdom’s east coast. It will cover an area of approximately 1,150,000 sq m and will utilise cutting edge technologies to ensure world class standards in safety, quality and efficiency. 

“Expanding our fabrication capacity in Saudi Arabia demonstrates McDermott’s commitment to the kingdom’s Vision 2030 objectives,” said David Dickson, McDermott’s president and CEO.

“We will establish a world-class fabrication facility that enables us to better serve the needs of Saudi Aramco and other customers in Saudi Arabia and across the region,” added Linh Austin, McDermott senior vice president for the Middle East and North Africa.

Saudi Aramco said at peak production, the facility will have a throughput capacity in excess of 60,000 metric tonnes per year. It will localise expertise in multiple disciplines related to the industry and is expected to create a significant number of direct and indirect job opportunities in the kingdom.

Apprenticeship and training programmes will also be provided to ensure that a sufficient number of qualified nationals of the kingdom are available for hire to meet the in-kingdom content requirements. The facility is expected to be operational by 2022. 

MMO JV FOR SAUDI ARAMCO

Meanwhile, McDermott International also signed a joint venture agreement with Zamil Offshore to target the Maintenance, Modifications and Operations (MMO) market in Saudi Arabia.

McDermott and Zamil will work together on an exclusive basis to provide Saudi Aramco with comprehensive offshore brownfield EPCI solutions and asset maintenance services, the company said in a statement. The new joint venture will be uniquely positioned to offer integrated, cost effective MMO services, to address the rising market demand in Saudi Arabia.

The partnership with Zamil will provide McDermott access to a new revenue stream in the maintenance, turnaround, inspection, and asset integrity services market in Saudi Arabia.

“Our partnership with Zamil reflects McDermott’s commitment to supporting Saudi Aramco across the oil and gas production life cycle,” said Austin. “Building on the strengths and distinguished track-record of both companies and fueled by McDermott’s technology and digital-ready solutions,” added Austin, “we will enable our customers to maximise the performance of offshore assets by increasing reliability and production uptime.”

The joint venture bolsters McDermott’s long-term growth plans in Saudi Arabia and is expected to significantly contribute to the in-Kingdom Total Value Add (IKTVA) programme and local content commitments, ultimately supporting Saudi Vision 2030.