King Salman Global Maritime Industries Complex will be largest shipyard in Middle East
Saudi Arabia is looking to move beyond petroleum production, as the Kingdom prepares for the inevitable decline of its massive oil fields and the prosperity that has come from them.
Today Aramco announced a newly-created joint venture with Hyundai, Bahri and Lamprell to build a massive shipyard in the Persian Gulf. The King Salman Global Maritime Industries Complex is being built in Ras Al-Khair, Saudi Arabia, and will be the largest shipyard in the region upon completion.
Cost estimated at $5.2 billion – includes facilities to build oil rigs, platforms, crude tankers
The shipyard will cover 1.7 square miles when complete, with several dry docks and over 15 piers and wharfs. These will be split into four zones, shipbuilding, ship repair, oil rig construction and oil rig support.
The shipyard will have the capacity to build three VLCC’s (very large crude carriers), and an additional 15 shipping vessels of various sizes. When operating at full capacity, the yard will also be able to build four drilling rigs and 11 fixed offshore platforms each year.
While Aramco did not release financial details with this announcement, previous estimates have put the shipyard’s cost of construction at over $5.2 billion. According to Reuters, the Saudi government will cover about $3.5 billion of the cost, while the rest will be funded by the joint venture. Aramco will own 50.1% of the venture, while Lamprell and Bahri will own 20% each and Hyundai will own 10%.
The complex is expected to begin initial production in November 2018, followed by operation of the rig 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. Aramco estimates that the shipyard will contribute about $17 billion to Saudi GDP and create more than 80,000 direct and indirect jobs by 2030. If these projections are accurate, the King Salman Complex will be a major contributor to diversifying the Saudi economy, a long time goal of the Saudis.
