SAUDI Arabia plans to raise the capacity of its second largest port in Dammam and may spend more than $613 million on port expansions to rival other regional ports, the transport minister said.

“All ports are currently being expanded. We are now investing SR2.3 billion ($613 million) in projects at all the ports and we continue to expand, particularly the industrial ports in Yanbu and Jubail,” Jobarah Al Suraisry said, adding that the next budget due in six months would see the launch of additional projects.

The world's largest oil exporter, which is trying to diversify its economy away from oil, has nine ports, with around 200 docks, Al Suraisry said in Jeddah.

The largest port is Jeddah Islamic Port (JIP) on the Red Sea, which has increased its capacity to around 5 million TEU (20-foot equivalent units), after it opened the new Red Sea Gateway terminal at the end of 2009.

Al Suraisry said he believed that despite the downturn in the global economy, the JIP will see at least a five per cent increase in traffic this year.

It handled 3.9 million TEU in 2010, according to the Saudi Ports Authority.

The second largest port in Dammam will also double its capacity over the next three years to hold three million containers, Al Suraisry said.

He did not give an estimate for the cost but said the expansion is to be carried out by the Saudi Public Investment Fund and Singapore port operator PSA.

Saudi Arabia is spending billions of dollars on infrastructure projects, including $400 billion to be spent in the five years to 2013, and over $130 billion for social and infrastructure projects. A port catering to grains imports is to be built by the private sector over the next two to three years, Al Suraisry said.