Investing for the Future
As the world’s leading oil producer and exporter, and ranked fourth in the production of gas, Saudi Arabia has a mature and expanding refining and petrochemicals industry. In the late 70s, the Royal Commission created two major industrial cities – Jubail and Yanbu. Jubail I – some 31 miles2 (80 km2) – is now fully committed, and Jubail’s second industrial site – some 24 miles2 (62 km2) – is now under development and is expected to be completed by 2007. Its first phase – giving room for more than USD 20 billion of capital projects – is already oversubscribed, and the only factor that appears to be holding back final investment decisions at present is the limitation of gaseous feedstocks. Saudi Basic Industries Corporation’s (SABIC) aggressive expansion plans include new major ethylene cracker complexes in Jubail and Yanbu. Further development of the Yanbu industrial area is also expected to host many major petrochemical projects.
The increased prospects in downstream petrochemicals combined with the heavy investment in the oil and gas industry provides some real opportunities for Aker Solutions.
Both local and foreign private investors are taking advantage of the improving business climate. The increase in private investment is not just coming from the repatriation of Saudi capital from overseas, but also as a result of the changes made to attract more foreign investment. New rules give private investors opportunity to own and run their projects independently. Financial facilities from the Saudi Industrial Development Fund and reduction of corporate tax further stimulate the developments.
Portal to Worldwide Resources
With such improving prospects in Saudi Arabia, Aker Solutions is building upon its presence in the Kingdom. The group has executed projects in Saudi Arabia for more than 30 years and has a successful track record of managing projects for companies such as Saudi Aramco and a number of SABIC affiliates, including the engineering, procurement, construction and pre-commissioning assistance for the Ibn Zahr I polypropylene plant.
So as a highly concentrated market with significant activity across Aker Solutions' target sectors, Saudi Arabia is seen as a particular priority for further growth. The company's focus and firm commitment to the country has intensified in recent years, and in 2003, this resulted in the award of the Gulf Advanced Chemical Industries Company Limited (GACIC) butanediol (BDO) project. This successful project achieved an excellent safety record, and reached mechanical completion in August 2005. As a second step, in 2004, Aker Solutions consolidated the activities of its two in-Kingdom organizations, John Brown SA Ltd. and Saudi Davy Company Ltd. into a single, more focused entity, Aker Kvaerner Gulf Ltd. (AK Gulf). The operation provides operational support to Aker Solutions' in-Kingdom projects. “We have the experience and expertise to act as the portal for Saudi Arabian customers wishing to access any part of the Aker Solutions' services and product portfolio,” says Henk Dolman, General Manager, Aker Solutions.
The primary focus for Aker Solutions in Saudi Arabia at present, he explains, is on projects in the petrochemicals sector, where the company holds key technology positions for processes such as polyethylene, polypropylene, ethylene oxide/ethylene glycol, acetic acid, methanol and derivatives like pure terephthalic acid, BDO and caprolactam.
“In Aker Solutions we have created a focused service provider equipped to deliver complex projects and integrated solutions by concentrating on niche technologies or knowhow positions. Our vision is set firmly on leveraging this engineering, procurement and construction execution capability in Saudi Arabia and, longer term, developing it to other parts of the Middle East,” he adds.
“Our focused approach and strategy is already paying off. In 2005, Aker Solutions won the YANBU National Petrochemical Company (YANSAB) polyethylene, polypropylene and product handling contract and the Project Management Services contract for the Ibn Zahr polypropylene III project. We are looking to further expand the business and to grow the execution capability of our in-Kingdom organization to serve our clients directly. Local expertise is essential in the next phase of developing our local operation into an execution and business hub.”
Building this local expertise and substantial in-Kingdom project experience and being supported by Aker Solutions' global resources and systems make a powerful combination. Excellence, believes Dolman, can only be achieved through an outstanding health, safety and environment mindset and predictable project execution by applying Aker Solutions' proven Project Execution Model and effective engineering capability.
Printable version