Saudi Arabia signs $50bn agreements at Future Investment Initiative
The multi-sector MoUs include transport schemes such as Haramain Rail and Saudi Land Bridge
More than 20 memorandums of understanding (MoUs) and agreements worth in excess of $50bn (SAR187.6bn) were signed on Day 1 of the Future Investment Initiative summit that is being held in Riyadh on 23-25 October 2018. The summit has been organised by Saudi Arabia’s Public Investment Fund, which is led by Crown Prince HRH Mohammed Bin Salman.
The MoUs and agreements include what were described as ‘megadeals’, and are said to highlight the attractiveness of Saudi Arabia as an investment destination. The signing ceremony included three clusters of deals, with Cluster 1 including 12 megadeals.
These MoUs included numerous project collaboration opportunities with Saudi Aramco, which will team up with local and international firms to develop a copper and zinc smelter and a petrochemicals complex in Jazan. Another megadeal signed at the event was for Phase 2 of Haramain Rail, with Saudi Arabia’s Minister of Transport Nabil Al-Amoudi overseeing the MoU that includes a Spanish consortium working on the project.
A joint agreement was signed to build an integrated petrochemicals complex for Phase 2 of Saudi Aramco Total Refining and Petrochemical (Satorp), a joint venture between Saudi Aramco and France's Total Oil Co. Amin H Nasser and Patrick Pouyanné, respectively the chief executive officers of Saudi Aramco and Total, signed the MoU.
Saudi Aramco and Japan’s Sumitomo have also teamed up to invest in a refinery at Petro Rabigh, while another MoU was signed for a refinery at King Salman Global Maritime Industries Complex. The latter deal was signed by Saudi Aramco and Hyundai Heavy Industries.
The fifth megadeal pertained to another public transportation project – Saudi Arabia’s Public Transport Authority (PTA) joined China Civil Engineering Construction Corporation (CCECC) for an MoU related to the Saudi Land Bridge development. Rumaih Al Rumaih, chairman of PTA, signed the MoU with Yuan Li, chairman of CCECC.
Additional deals within Cluster 1 included an agreement for the local manufacturing of railway freight cars; an MoU for joint investment in refining, processing, and marketing between Saudi Aramco and Norinco; and a gasification-related Jazan job, on which the recently formed joint venture of Saudi Aramco, Air Products, and Acwa Power will work.
Cluster 2 of the agreements focused on the “convergent industries” that Saudi Arabia is focused on to generate greater added value and promote growth of gross domestic product (GDP). This group includes a deal between the Ministry of Energy and Halliburton, and an agreement to invest in the rubber industry, also represented by the energy ministry. Two other deals for industrial projects producing advanced polycarbonates and batteries were also agreed at the conference.
Nine agreements were signed under Cluster 3, which focuses on the localisation of the Saudi Arabian energy industry’s supply chain. One of the deals signed within this group featured Saudi Aramco’s Nasser and Baker Hughes GE’s Lorenzo Simonelli.
An MoU was also signed for engineering, construction, and installation between Ahmad Al-Saadi, senior vice president of technical services at Saudi Aramco, and Ahmed Al Dhaheri, chief executive officer of UAE-based engineering, procurement, and construction contractor National Petroleum Construction Company (NPCC), a joint venture between Senaat (70%) and Consolidated Contractors International Company (CCIC) (30%).
Additional MoUs were signed between companies such as Aramco, Schlumberger (US), Flexsteel (US), Halliburton (US), and SeAH Changwon Integrated Special Steel (Korea).
Future Investment Initiative is being held at Riyadh’s Ritz Carlton hotel. Among the high-level dignitaries attending the conference are HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai; Pakistan’s newly elected Prime Minister Imran Khan; and Jordan’s King Abdullah. Representatives of Mubadala (UAE), DP World (UAE), Adnoc Group (UAE), Russian Direct Investment Fund, and Neom (Saudi Arabia) are among the speakers lined up for the event.