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State oil giant Saudi Aramco has won approval from the government to set up two new companies that will develop and operate a new energy industrial city in the kingdom

State oil giant Saudi Aramco has won approval from the government to set up two new companies that will develop and operate a new energy industrial city in the kingdom.The Aramco move comes as the kingdom seeks to expand its industrial base, according to a report by the official Saudi Press Agency (SPA). The new industrial city will be developed over 500ha of land in the oil-producing region in the Eastern province.

The city will be close to Abqaiq located in the sprawling Rub Al Khali desert 60km southwest of the Dhahran-Dammam-Al Khobar metropolitan area close to the Aramco oil-processing facilities and will develop energy-related industries.

The government approved Aramco's offer to set up a developer that will undertake laying out the infrastructure of the city and managing its fixed assets. This company will eventually own the fixed assets in the city. Aramco will also set up another company to handle operations and maintenance of the industrial city.

The creation of ‘industrial cities’ — huge projects in which state institutions play key roles in planning and raising finance, but which seek to attract private investment — is part of the government's efforts to jump-start development.

A senior Aramco official said in March, the investments in the city are expected to be $4.4bn (SAR 16.5b)

In May, Saudi Aramco signed deals to build the Gulf's largest shipyard through a joint venture with three companies, a $5.2bn project aimed at helping reduce the economy's reliance on oil and create jobs, a key part of the Saudi Vision 2030.

Aramco has also launched the In-Kingdom Total Value Add (IKTVA) initiative to double the percentage of locally produced energy-related goods and services to 70% of the total spent by 2021.

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Published Date: 
Wednesday, July 12, 2017 - 08:00
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Modified Date: 
Wednesday, July 12, 2017 - 08:00
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