New industry coming to Ras al-Khair

Here’s another interesting story from Saudi Arabia.

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State oil giant Saudi Aramco has extended bidding for dredging and reclamation work at its marine terminal in Ras al-Khair by almost one month, industry sources told Reuters on Wednesday.

Aramco (the national Oil company) are planning to build a large marine terminal in the east of the Country at a place called Ras al-Khair (RAK) – this is a place I know, as I’ve visited there when working on a project for the Saudi national mining company Ma’aden.

Ma’aden are in the middle of a major expansion of their operations in the north of the country (where large phosphate deposits exist) and intend to send some of the products and intermediates by rail to RAK (where they have a fertiliser and animal feed facility at the moment) for further processing and export.

Part of the Ma’aden project was to extend the jetty area around their facility, but this project is;

the first phase of a huge ship repair and shipbuilding complex in the east of the country seen as key in the kingdom’s economic transformation plan.

It’s certainly a prime area for development, with a large expanse of space surrounding the existing RAK port and industrial area. There are already some rail links but I expect these will be upgraded significantly once the marine terminal is built.

As well as the Ma’aden phosphate plant at the site, it’s not too far to other Aramco installations including Ras Tanura, Jubail and Khursaniyah (pictured above).

It’s interesting that Aramco are spearheading the project at this stage although the completed complex will be;

operated by a joint venture between Aramco, the National Shipping Company of Saudi Arabia (Bahri), United Arab Emirates-based Lamprell and South Korea’s Hyundai Heavy Industries.

I guess that a large project like this is the sort of thing Aramco has more experience of than any other entity in the Kingdom and when you look at the potential boost to the economy it’s not surprising that they want a piece of it;

Saudi Aramco has said it expects the complex, which is projected to create 80,000 jobs and allow Saudi Arabia to reduce its imports by $12 billion as well as increase gross domestic product by $17 billion, will be fully operational by 2021.

Sadara Starts Up

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Spotted this story in the news this week – why is it significant?  Well, I worked on the FEED phase for over a year, leading the Interfaces team that helped document and validate the thousands of interfaces between the various process Units, ensuring that every Unit was supplied with the correct feeds and utilities, and produced product and effluent streams that downstream units could handle.

 

Sadara Chemical, a $20 billion petrochemical joint venture between national oil giant Saudi Aramco and Dow Chemical, has started operating its mixed-feed cracker at the venture’s petrochemical complex in Jubail.

The Sadara complex, comprising 26 integrated facilities, is the largest petrochemical facility to be built in a single phase. All facilities are scheduled to be commissioned by the end of 2017.

 

Is this a turning point?

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After a year of low oil prices which have brought cheaper fuel for most but lack of investment leading to wage and job cuts in the oil and gas industry have we finally turned the corner?

This article in World Oil cites the 27% rise in crude prices in three days amid news that maybe Saudi Arabia and Opec are ready to discuss a cut in output as long as it is a global cut and not just Opec countries.

Some people are trying to downplay the news, maybe they are right, the price of oil seems to be being driven purely by speculators and market makers rather than supply and demand fundamentals.

Remember how many times in the past, when the oil price went up, we were told it was due to instability in the middle east?

Can the Middle East have ever been less stable than right now?  And yet oil is at lows not seen for 6 years.

It’s a strange World out there!

What Now For Saudi Arabia

Jubail Power

Following the death of the King of Saudi Arabia the World, and especially those of us working in the Oil Industry, await news of what the new King plans to do with the price of oil.

The Daily Telegraph has this story.

King Abdullah will be succeeded by the Crown Prince Salman bin Abdulaziz al-Saud. But the transition could bring the kingdom’s current policy of forcing down oil prices into focus.

King Abdullah was a key supporter of the kingdom’s oil minister Ali al-Naimi. His death may therefore weaken the position of this long-serving official. Mr Naimi has already faced criticised within the kingdom for allowing crude to tumble from over $100 per barrel since last summer.

Lower oil prices help consumers, have caused UK inflation to fall to its lowest level for years and made the Labour Party’s pledge to freeze energy prices look even sillier than it previously did.

However it also makes companies reluctant to invest in new projects  – projects that will be needed when the global economy is back firing on all cylinders again (pardon the pun) in 2 or 3 years time.

We could find that in around four years time we’re staring down the barrel (oops another pun) of $200 per barrel oil due to lack of investment now.

 

A Dangerous Game

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As the price of oil continues to fall, pump prices are bringing some relief to consumers and businesses, but it seems the Saudi strategy of driving down prices to gain market share is a dangerous one to play as THIS ARTICLE in the DT today points out.

From a personal perspective, lower prices also adds uncertainty to new Oil & Gas Projects and implies that 2015 could be a quiet year in the Engineering sector.