Price Tag Put on Saudi Maritime Complex

Saudi Arabia expects a huge ship repair and shipbuilding complex that its national oil company Saudi Aramco is developing at Ras al-Khair on the kingdom's east coast to cost over 20 billion riyals ($5.33 billion), energy minister Khalid al-Falih said on Sunday.

"Construction will start in 2018, production in 2022," Falih who is also chairman of Aramco told reporters at the company's headquarters in Dhahran.

The government will finance the infrastructure of the complex such as dredging and other work as it did with other cities Jubail and Yanbu that have become major industrial hubs.

Ras al-Khair is itself turning into a major mining hub where Ma'aden has built an aluminum complex and phosphate facilities.

The maritime complex is a joint venture between Saudi Aramco, Saudi Bahri, South Korea's Hyundai Heavy Industries and Lamprell.

The project will help generate thousands of direct and indirect jobs, a key part of Saudi Arabia's Vision 2030, an economic reform program the government announced this year, in which Aramco is to play a big role in developing industrial projects as Saudi Arabia tries to diversify its economy beyond reliance on oil exports.

Falih said other partnerships will be forged such as with U.S. McDermott company which will make offshore platforms.

He was speaking to journalists to brief them on the inauguration by King Salman of oil and gas and industrial projects and a cultural center. Those projects cost around 160 billion riyals, he said.

He said the Sadara joint venture between Aramco and Dow Chemical alone cost as much as 80 billion riyals.

Among the projects that Saudi Aramco has completed are the Khurais oilfield which has a production capacity of 1.2 million bpd, Shaybah whose production has reached one million bpd after recently completing an expansion and Manifa's 900,000 bpd.

Aramco is working on expanding capacity at Khurais to 1.5 million bpd, seen on stream in 2018.

"The production capacity of oil projects that the King will inaugurate exceeds or is around three million barrels per day."

Saudi Arabia's maximum sustainable production capacity stands at 12.5 million bpd, Falih reiterated as the additional capacity was just replacements for mature oilfields.