Jubail: the biggest is getting bigger

In 1983 Saudi Arabia’s Jubail Industrial City was cited in the Guinness Book of Records as the largest engineering and construction project ever attempted. In 2009 it’s still getting bigger. Benjamin Millington went onsite to gauge the scale of expansion.

Forty years ago Jubail was nothing more than a coastal village in eastern Saudi Arabia, which relied on fishing and pearl diving to drive the local economy.

Today it is the world’s largest industrial city and home to a multi-billion dollar petrochemicals industry that accounts for 7% of Saudi Arabia’s gross domestic product.

The rapid transformation was kick-started in the mid 1970s when the King established the Royal Commission for Jubail and Yanbu – a government entity dedicated to the development of two industrial cities; Jubail on the east and Yanbu on the west coast.

Over the next 35 years the two cities rose out of the desert sands with the help of US engineering giant Bechtel acting as consultants on the project from master planning to construction management, a relationship that continues to this day.

Currently the Royal Commission and Bechtel’s Saudi entity, the Saudi Arabian Bechtel Company (Sabco), is overseeing a massive expansion of Jubail Industrial City, which includes huge new residential areas, a university, bigger port facilities, a rail network and a new industrial zone dubbed Jubail Two.

Jubail Two
Covering an area of 84km² Jubail Two is located 8km to the west of the original industrial zone of Jubail One, which already contains a range of primary, secondary and support industries, the majority of which are related to petrochemicals.

Similarly, the industries destined for operation in Jubail Two will also be centred on petrochemicals, including a US $8 billion (SAR30 billion) refinery to be built and operated by Satorp – a joint venture between Saudi Aramco and France’s Total.

The refinery will have the capacity to process 400,000 barrels of Arabian heavy crude a day to produce gasoline, diesel, jet fuel and petrochemical products for export and domestic consumption.

Satorp has started some site preparation for the refinery but is reportedly delaying main construction contracts to take advantage of cheaper construction costs expected as a result of the financial crisis.

Meanwhile the Royal Commission and Sabco are busily working to provide Jubail Two with all necessary infrastructure including power, telecommunications, roads, water and wastewater.

Sabco’s manager of projects, Abdullah Al Satarwah  says work on the infrastructure for Jubail Two is being completed in four stages, each stage covering roughly 20km².

“We started stage one in 2004 and we should be finished this month with everything in place,” he says.

“We want the industries to be able to move straight in and have everything they need available right up to their doorstep - this is the plan and so far we’re on target.

“There are between 16 to 17 contractors working on site and this can be a challenge to manage, but there have been no other problems and we should finish on time.”

Abdullah says stage two of Jubail Two is scheduled to finish in December 2010, stage three in December 2012 and stage four in December 2015. The estimated cost of the first three stages is around $1.85 billion, with the cost for the fourth stage yet to be determined.

Another crucial element to Jubail Two’s infrastructure is construction of a $115 million pump station to supply the industries with sea water for cooling, says Aamar Hassan, area const-ruction manager.

The pump station is being built at the end of an open canal which services the industries in Jubail One and draws its water directly from the Gulf.

Once completed, Hassan says the pump station will transport sea water to Jubail Two through an 8km stretch of two 4m diameter supply pipes at a rate of up to 200,000m³ an hour, with another 4m diameter pipe installed for supply/return and two more 4m diameter pipes for the return of sea water to the outfall.

The main contractor for the job is Al Harbi Trading and Contracting Company and the contract is expected to be
closed out by the end of this year.

Infra support
In line with the development of Jubail Two, Sabco programme manager, Dr George Dinic, says they’re also overseeing major expansions to the city’s pipeline corridors and main port facility, King Fahad Industrial Port (KFIP).

“There is a tremendous amount of work to be done on the pipeline corridors, which transport (liquid) products from the industries to the KFIP,” he says.

“There are new pipelines coming from Jubail Two and further expansions and debottlenecking for Jubail One.
“In addition to that, the expansion of the KFIP is ongoing. Most recently we completed an 80 hectare (800,000m²) petrochemical quay with five new berths that can accommodate tankers for liquid petrochemical products up to 80,000 tonnes and with a length of up to 230m.”

Dinic says the next step for Jubail’s freight facilities is the construction of the Jubail Rail Network, a 195km heavy rail line across Jubail One and Two which will transport products from the industries to the ports, primarily Jubail Commercial Port.

“We have already completed a concept study and we’re now proceeding with the front end engineering design. We are also in discussions with Saudi Rail Organisation (SRO) to link it up with the northern rail line and the line from Dammam,” he says.

“Ultimately we’ll have to complete it by 2013, for Jubail One at least.”

Residential growth
As the industrial capacity of Jubail Industrial City grows, so too does its demand for workers and residential units.

Dinic says the city currently has a permanent night time population of around 100,000 but this is expected to grow to around 300,000 with the develo-pment of four new residential districts, Jalmudah, Mutrafiyah, Mardumah and Reggah. Each of the areas is around 10km² and when built up will have 8500 dwelling units housing around 45,000 people.

In the Jalmudah district construction of 650 houses is already underway, through three contracts that have been issued by the Royal Commission and more to follow.

For the Mutrafiyah area two site preparation contracts have been awarded and a third is in bidding. The Mardumah area is currently in the master planning stage with the master plan for Reggah to commence shortly after.

On top of this, Dinic says Sabco is also involved in managing the master plan for a city centre covering 3.5km², which will act as a centre for all the districts and which is sandwiched between the three new districts overlooking the bay area.

Site preparation is also underway for Jubail University College, a development covering 1.85km².

“There are huge contracts to come in the form of academic buildings and residential areas for the university – we’re talking billions of riyals,” says Dinic.

The entire residential area build up isn’t expected to be completed until 2023.

Obtaining finances
Across the region construction contracts are becoming thin on the ground and financing harder to obtain, but Jubail Industrial City is bucking the trend.

Far from being damaged by the financial crisis, Dinic says they are actually benefiting as the government pumps money into infrastructure projects to boost the economy and maintain employment levels.

For 2009 the Royal Commission has been given a budget of $880 million for construction contracts, a 35% to 40% increase in their previous annual expenditure, and Sabco is looking to bolster its workforce from 300 to 370 by the end of this year.

With a solid finance base and so much work going it is little wonder that the Royal Commission has at least 50 active contracts in construction at any point in time.

“They can go from small contracts such as 10 million riyals ($2.7 million) right up to 500 million riyals ($133 million) plus.

“For this year alone we’ve got a further 48 contracts forecast to be awarded.”

Dinic also  says he’s noticed a 25% reduction in the price of contracts due to an increase competition and falling building
material prices.

Likewise he says the private industrial developers are also in a good position to take advantage of the financial crisis.

“This is a good opportunity for anyone with a long-term vision to properly plan an industrial project so that when the demand comes back the industry will be there.”