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Sabic affiliate Sharq   petrochemical plant in Jubail

Sabic affiliate Sharq petrochemical plant in Jubail



Industrial cities drive growth

With a line-up of new projects and investments, Jubail and Yanbu industrial cities are playing a critical role in Saudi industrial development and are helping the kingdom diversify its economy in a significant way

October 2019

Investments in the industrial cities of Jubail and Yanbu, overseen and developed by the Royal Commission for Jubail and Yanbu (RCJY), are moving ahead for expansion and development that are certain to further alter Saudi Arabia’s industrial landscape and generate employment for its growing population of educated youth.

Attracting an investment of more than $267 billion, with 620 industrial projects manufacturing close to 100 basic products, the RCJY industrial cities of Jubail, Yanbu and Ras Al-Khair are continuing to expand aggressively. Jazan Economic City, recently added under the RCJY fold, is the latest jewel in its crown.

According to the Gulf Petrochemicals and Chemicals Association (GPCA), RCJY cities contribute 12 per cent of Saudi Arabia’s GDP and 85 per cent of its non-oil exports and produce about 10 per cent of global petrochemical products. They are home to 175,000 workers, 70,000 students and a host of investors from all over the globe.

RCJY cities’ competitive package of land, utility and infrastructure services, coupled with easy access to markets, makes it a must for consideration for any firm looking to expand its footprint in the Gulf region.

 

$533M DEALS SIGNED

In 2019, the authority signed SR2.17 billion worth of contracts on developing the infrastructure in the cities under its authority during the past eight months.

From January to August 2019, the RCJY has inked deals amounting to SR 347 million for designing and establishing the power transmission and distribution network in Yanbu Industrial City, the Royal Commission said.

Air Liquide’s plant in Yanbu

Air Liquide’s plant in Yanbu

Furthermore, the Saudi entity has penned SR 155.41 million worth of contracts in the past eight months to develop the roads in Jubail Industrial City. The RCJY has also signed agreements worth SR 119.39 million to develop the facilities of Jubail Industrial College.

 

SATORP UNITS RESTARTED

Meanwhile, Satorp’s aromatics units at Saudi Arabia’s Jubail refinery restarted at the end of August or early September, having been shut since early July because of technical issues at a 20,000 bpd
reformer.

The 460,000 bpd Jubail refinery operated by Satorp – a joint venture between Saudi Arabia’s state-owned oil firm Saudi Aramco and Total – can produce up to 700,000 tonnes per year (tpy) of paraxylene (PX) and 140,000 tpy of benzene.

The PX shipments are available from September, with Satorp already providing October-delivery laycans to some of its customers.

 

RFP FOR NEW DESAL PLANT

Earlier in August, Saudi Water Partnership Company (SWPC) issued a request for proposals (RFPs) for the development of a reverse osmosis desalination plant in the Eastern Province of Saudi Arabia to the qualified bidders.

The 600,000-cubic-metre-per-day (cu md) Jubail-3A independent water project (IWP) will be located 18 km south of Jubail Industrial City along the Arabian Gulf coast, adjacent to the existing plant units (Jubail Phase 1, Jubail Phase 2 and Jubail RO plants).

Power supply to the project will be facilitated from the high voltage network.

SWPC had initially invited expressions of interest for an integrated water desalination and power plant of 1.17 million cu md of potable water capacity and 3,000 MW of power, together with associated infrastructure and facilities. However, the concept was revised and the company later split the project into two IWPs - Jubail-3A with a capacity of 600,000 cu md and Jubail-3B with a potable water capacity of 570,000 cu m per day.

Under a concession of 25 years, the selected developer will sell the entire capacity and output to SWPC under a water purchase agreement (WPA). SWPC’s obligations under the WPA will be supported by a credit support agreement from the government of Saudi Arabia.

 

MEGA JUBAIL PROJECT

In another related development, a total of 43 global utility developers submitted bids to develop an independent water and power project (IWPP) at the south of Jubail Industrial City on the Arabian Gulf Coast, said Saudi Water Partnership Company (SWPC).

The project is set to have a capacity of 1.17million cu md of potable water through 60 per cent reverse osmosis (RO) and 40 per cent thermal desalination technology, respectively.

Out of the 43 utility developers, 11 are regional heavyweights including Acwa Power, Kuwait-based Gulf Investment Corporation, UAE’s MDC Power Holding Company and others.

Other regional companies include Nesma Holding, Saudi Technologists Consulting Engineers And Partners Company (Satech); Bahr Rawafid Company (Rawafid); Shibh Al Jazira General Contracting; Amwal Al Khaleej; Saudi Services for Electro Mechanic Works (SSEM) and many others, noted the source.

International industry giants that submitted bid for the mega project are General Electric Company; Engie, Veolia and EDF ; Acciona Agua, Cobra and Abengoa; Mitsubishi, Sumitomo, Mitsui and Marubeni besides Chinese consortiums led by Harbour Engineering Arabia Company and JSG, Korea’s Kepco and Indian utility group Nutek, according to the senior SWPC officials.

The new Jubail Phase 3 plant will be located adjacent to the existing plant units (Jubail Phase 1, Jubail Phase 2 and Jubail RO plants) in the eastern Province of Saudi Arabia, the source further added.

After completion, the project is set to have a capacity of 1.17 million cmd of potable water through 60 per cent reverse osmosis (RO) and 40 per cent thermal desalination technology, respectively.

 

MANUFACTURING FACILITY

Earlier in March, Saudi Aramco signed a land lease agreement with McDermott International to establish a fabrication facility in Ras Al Khair industrial city.

The American contractor’s wholly owned local subsidiary will be located within the King Salman International Complex for Maritime Industries and will be used to manufacture offshore platforms as well as onshore and offshore modules.

The facility will be located along the country’s eastern coast near the Jubail Industrial City and will stretch across an area of 1,150,000 sq m. It is expected to have a production capacity in excess of 60,000 tonnes per year.

Aramco, the world’s biggest crude producing company, is beefing up its manufacturing portfolio domestically and has invited companies to set up base across its industrial cities. In December, the company opened an industrial park in the Eastern Province, which is expected to contribute $6 billion to the kingdom’s gross domestic product and generate 100,000 jobs by 2021.

As part of its agreement with Aramco, McDermott will also establish a new marine base in the Eastern Province to support the 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 hub for not only the kingdom, but for the GCC region,” said Ahmad Al Sa’adi, Saudi Aramco senior vice president for technical services.

The facility is expected to create 7,000 jobs and reach a Saudisation target of 60 per cent by 2030, Aramco said.




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