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Saudi Crown Prince unveils Aramco energy megaproject Spark

Among Spark's first 10 tenants are Baker Hughes (GE), Schlumberger, and Halliburton

Saudi Arabia's Crown Prince HRH Mohammed Bin Salman unveiled Saudi Aramco's energy megaproject Spark on 10 December, 2018 [image: Twitter/ksa_spark].
Saudi Arabia's Crown Prince HRH Mohammed Bin Salman unveiled Saudi Aramco's energy megaproject Spark on 10 December, 2018 [image: Twitter/ksa_spark].

Saudi Arabia’s Crown Prince, HRH Mohammed Bin Salman, unveiled King Salman Energy Park (Spark), a Saudi Aramco megaproject, on 10 December, 2018. Spark will generate 100,000 direct and indirect jobs and contribute up to $6bn (SAR22bn) to the kingdom’s gross domestic product by 2035, in line with the Saudi Vision 2030 programme.

Located between Dammam and Al-Ahsa in Saudi Arabia’s Eastern Province, Spark is a three-phase 50km2 hub for energy, industrialisation, and technology that will report Phase 1 construction completed in 2021. Phase 1 spans 12km2, with investments totalling $1.6bn (SAR6bn).

Construction work on Spark started in September 2017, as per a Saudi Aramco statement on 6 December, and engineering designs for the scheme are currently more than halfway complete. Investor plot allocations were carried out in Q3 2018. 

READ: Saudi Crown Prince attends Bahrain launch of Aramco-Bapco oil pipeline

According to an Arabic-language report by Saudi Arabia’s state news agency, SPA, the city features five major regions. Phase 1 will comprise general manufacturing, industrial facilities, a dry port area, a Saudi Aramco well-drilling and maintenance area, and a specialised training zone for 10 centres focused on enhancing Saudi citizens’ skills. The project also includes residential, commercial, and recreational areas. At maturity, the dry port will have a capacity of eight million metric tons of cargo, with high levels of automation. The completion of Phase 1 will see Spark attracting more than 120 investments, according to a separate, English-language report by SPA.

Spark will be operated and anchored by Saudi Aramco, which will build its drilling and workover headquarters within the city, as well as operate its procurement and supply chain management centre from the space. Aramco will develop, operate, manage, and maintain the park’s infrastructure in partnership with Saudi Authority for Industrial Cities and Technological Zones (Modon). 

According to Spark’s website, the project seeks to attract industrial investors across five major sectors, such as upstream, downstream, petrochemicals, power, and water and wastewater. In addition to work for Phase 1, also under way is the development of a regional logistics zone with customs that will link Spark to the rest of the kingdom and Gulf States along the region’s planned rail project.

On its Twitter account, Spark said that its first 10 investors and tenants include Baker Hughes, a GE Company, Borets, Valvo Spain, Schlumberger, Al Rushaid Group, Halliburton, Emerson, University of North Dakota Aerospace, Oilfields Supply Centre Ltd, and NESR. On its website, Spark stated that interested investors can be offered land access as Phase 1 development work continues. Schlumberger signed on as Spark’s first investor in December 2017, with the firm to build a centre for manufacturing onshore oil and gas well platform, plus supply chain products, within the city, Aramco revealed earlier this month. 

In a statement on its website dated 6 December, Aramco said that Spark is part of its supply chain initiative, In-Kingdom Total Value Add (Iktva), adding that the energy city would house “manufacturing and service activities ranging from equipment for drilling, electrical services, and liquids treatment [and] exploration and production services; to pipes, vessels, tanks, valves, and pumps”. Spark’s location, Aramco added, facilitates its integration with Dammam’s Third Industrial City, and offers it access to power generation and water sources, plus logistical services.

Spark is the latest in a string of endeavours by Saudi Arabia to diversify its economy away from petrodollars. Its launch comes days after the Crown Prince accompanied Saudi Arabia’s King Salman bin Abdulaziz Al Saud and HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, alongside other GCC leaders, at the launch of the Al-Turaif historical district in Diriyah. The tourism project encompasses Saudi Vision 2030’s ambitions and is expected to generate tourism revenue for the kingdom. 

READ: Saudi Crown Prince to attend Aramco megaproject launch

Additionally, Spark embodies Aramco’s ambitions to capitalise on its position as a global energy giant. The state-held firm has already noted progress on major projects this year, such as the Marjan and Berri oil fields. 

The involvement of global energy giants such as Schlumberger, Halliburton, and Baker Hughes builds on the memorandums of understanding (MoU) signed between the firms and Saudi Arabia at the Future Investment Initiative summit held in Riyadh this October. Saudi Aramco was a key signatory for many of the total 20 MoUs – worth a combined value of $50bn (SAR187.6bn) – signed on Day 1 of the summit, held on 23-25 October, 2018.

Construction Week's video on Spark will be published at 9am Dubai time on 11 December, 2018. Set a YouTube reminder for yourself to receive an early notification to watch the video:

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