King Salman Energy Park (Spark), the region’s only fully integrated energy hub, continues to expand its industrial infrastructure with the latest project launched at the mega hub in the Eastern Province having been a 277,000-sq-m drilling and workover facility for energy giant Aramco.
Work on the new Aramco drilling and workover head office and industrial hub is scheduled to be completed by the second quarter of 2023, says Spark, which will be providing the infrastructure and amenities for a workforce of 1,200 drilling and workover employees.
The project is being implemented by Aramco in co-ordination with Horizon Project Company on a build, own, operate and transfer (BOOT) model for a 22-year period.
Horizon is a special-purpose vehicle jointly owned by a Saudi consortium of Al Fouzan Al Sabiq Holding Company and Almutlaq Real Estate Investment Company.
The project is designed to centralise facilities for Aramco’s Drilling and Workover Services Department in a single location and further the oil and gas giant’s collaboration with oilfield service providers, in addition to supporting the development and localisation of key industries such as rig and equipment manufacturing, as well as casting and forging.
Senior Vice-President of Upstream at Aramco Nasir Al Naimi says: “This is another significant venture by Aramco that will contribute to business continuity. We expect the new facilities to attract other oilfield services companies, who have an indispensable role to play within the collaborative setting of an integrated energy ecosystem.”
Spark President and CEO Saif S Al Qahtani says: “We’re excited to announce Aramco’s new drilling and workover head office and industrial hub here. Its establishment will enhance the oil and gas supply chain by utilising the energy park’s advanced offerings, such as its logistics hub and dry port, to establish a thriving eco-system.”
In September last year, Spark formed a joint venture with Hutchison Ports to manage and operate the dry port and bonded logistics zone in the energy industrial city. Designed to ensure ease of access to global markets, the 3-sq-km dry port will target growing demand for logistics services for energy-related products in the Middle East and beyond while also serving neighbouring industrial cities.
Group Managing Director of Hutchison Ports, Eric Ip, stated that the company would leverage its logistics expertise to create value and competitiveness for the tenants of Spark.
Al Qahtani said its partnership with Hutchison Ports marks an important milestone in the project’s ongoing development.
“The dry port and logistics zone will be the key to unlocking the potential of our strategic location in the Eastern Province of Saudi Arabia, a region which is known for its unmatched oil and gas resources,” he says.
Spark, which is a manufacturing, service centre and logistics hub for the energy sectors and an integral part of the Saudi Vision, is fast taking shape over a 50-sq-km site located between Dammam and Al Ahsa and is being developed, operated and managed by Aramco.
Strategically located at the heart of the global energy market, Spark is focused on providing investors with ease of access, ensuring that supply chain and raw material companies are located in close proximity or are easily accessible through its Logistics Zone which includes the dry port, bonded area and a future railway connected to neighbouring countries.
Spark offers world-class infrastructure and support facilities. Through its partnership with Oilfields Supply Company Saudi (OSC), a 1-million-sq-m Common User Supply Base will create a favourable environment for small and medium enterprises (SMEs) and startups to gain access to their customers by providing pre-built industrial manufacturing facilities, de-risking the set-up phase for investors. The OSC facility offers the flexibility for investors to rent short-term or on demand, Al Qahtani states.
The first phase of the development is reported to be already 80 per cent allocated to industrial investors, with commitments for more than $2 billion of investment. This phase is divided into a number of clusters: logistics zone, industrial hub, business district, digital hub, and residential and commercial areas. The dry port and logistics zone will include warehouses and storage facilities, a bonded area and on-site customs clearance.
The energy hub is expected to contribute more than $6 billion to the kingdom’s GDP. It is targeting industrial investors across five strategic sectors: Upstream, Downstream, Petrochemicals, Power, Water and Wastewater.
The park will also seek to draw in investors from sectors with a supporting role to play, such as logistics operators and real estate developers.
Spark is pioneering the use of multiple cutting-edge technologies, ensuring that sustainability remains at the heart of the development. In particular, the park will feature two hubs focused on non-metallic materials and digital technology.
“In non-metallics, Aramco is already working with local and international suppliers and research institutes to accelerate development of solutions such as non-metallic pipelines and flowlines in the oil and gas sector,” Nabil Chaachou, Spark Vice President for Strategy and Business Development says. “Similarly, the digital hub reflects the importance of technology development for the energy sector. It will host data centres and advance cutting-edge technologies that are expected to have significant benefits for the industry, from artificial intelligence and big data analytics to 3D printing and process automation.”