Saudi, foreign firms sign memorandum of understanding for new shipbuilding complex

RIYADH - Reuters

Saudi and Foreign investors stand in front of the logo of Saudi state oil giant Aramco during the 10th Global Competitiveness Forum on January 25, 2016, in the capital Riyadh. The an annual event brings together high-ranking Saudi officials and world business leaders. AFP Photo

National oil giant Saudi Aramco has signed a memorandum of understanding (MoU) to establish a shipbuilding and repair complex in the kingdom, part of Saudi Arabia’s efforts to diversify its economy beyond oil, the company said on Jan. 26.

Pressured by low oil prices, Riyadh is laying plans to develop non-oil industries, using state spending to jump-start the process. The shipbuilding complex is one of the first big projects to be announced under this policy.

The MoU was signed with National Shipping Co of Saudi Arabia (Bahri), a state-controlled firm which ships oil for Aramco, as well as a subsidiary of London-listed Lamprell Plc , a United Arab Emirates-based engineering firm, and South Korea’s Hyundai Heavy Industries Co Ltd.

The companies will study a proposal over the next few months to build a maritime complex offering engineering, manufacturing and repair services for offshore rigs, commercial vessels and offshore service vessels, Aramco said.

Aramco did not give a value for the project, but chairman Khalid al-Falih told a business conference on Jan. 25 that it was expected to be located on Saudi Arabia’s east coast and could eventually create 500,000 jobs.

The complex will initially support Aramco’s operations but will ultimately move on to other markets, such as manufacturing container vessels, Falih said.