Saudi Aramco, the national natural-gas and petroleum company for the Kingdom of Saudi Arabia, has a memorandum of understanding with General Electric and Cividale SpA to build a “first of its kind, high-end” forging and casting complex at Ras Al-Khair, with production to start by 2020. The $400-million project seeks to supply critical finished parts to energy and maritime manufacturing interests in the Middle East and North Africa.
“The MoU reflects our ambition to create a robust supply chain that builds positive synergies in the oil-and-gas manufacturing sector,” according to Abdallah I. Al-Saadan, SVP - Finance, Strategy and Development for Saudi Aramco.
The partners’ respective investment stakes and their roles in the eventual operation were not provided.
Described by Aramco only in general terms, the "Forging and Casting Manufacturing Facility" is said to complement several other Aramco projects, including one focused on building and servicing offshore platforms, jack-up rigs, offshore service vessels, and commercial tankers.
With that information, together with the involvement of the Cividale group, it’s likely the new forging and casting operation would produce steel parts such as valves, shafts, heavy-duty housings, casings, or diesel and industrial engine components.
Cividale is a holding company for a number of forging, iron and steel casting, and precision machining plants in northeastern Italy. It supplies manufacturers with parts for power-generation, oil-and-gas, valves, shipbuilding, and mechanical systems.
Aramco’s statement promised the new complex would employ 2,000 workers in “quality jobs” and promote growth for Saudi small and mid-sized businesses.
Ras Al-Khair is a new industrial city being developed on the east coast of Saudi Arabia to take advantage of phosphate and bauxite deposits in the area. Other projects there include plants to produce di-ammonium phosphate, ammonia, phosphoric and sulfuric acids, an aluminum smelter, and an alumina refinery. A new 2,350-MW power station and a desalination plant will supply power.
Saudi Aramco is working with partners to develop an onshore rig manufacturing center there, as well as a diesel engine manufacturing and MRO center for marine pumps. It’s also developing an Energy Industrial City, as a base of operations for businesses serving the oil-and-gas sector.
The MOU reunites three partners who already have completed a feasibility study of Saudi Arabia’s forging and casting manufacturing capabilities. GE’s role is described as providing expertise in investment and development for “world-class manufacturing.” A GE spokesman added that the company would “engage Saudi SMEs to support the plant’s operations, and train and hire Saudi professionals, adding further value to the economy. By building a domestic forging and casting production unit, Saudi and regional customers can achieve greater operational efficiencies in product procurement, repair and service support.”