King Salman Energy Park provides a centralised area for the country’s localisation efforts to boost its energy infrastructure and supply chain
A look at King Salman Energy Park and localisation in the Kingdom.
King Salman Energy Park (SPARK), a 50sqkm “energy city megaproject” in Saudi Arabia, was inaugurated in December 2018 and is one of the Kingdom’s most impressive endeavours into localisation so far.
Once operational, it is expected to generate 100,000 direct and indirect jobs and should contribute $6bn to Saudi Arabia’s GDP annually.
The first phase of development is slated for completion by 2021, and will require an investment of around $1.6bn. One of the project’s initial partners is Baker Hughes, a GE company (BHGE), which will build an oilfield services facility in SPARK.
BHGE will build a state-of-the-art oilfield services facility in King Salman Energy Park. The facility will support ongoing customer activities for drilling services, wireline services and pressure pumping.
“This new facility will help build a new ecosystem for oilfield services within SPARK and support our commitments to invest in innovation, supply chain growth and training of new talent,” said Lorenzo Simonelli, chairman and CEO of BHGE.
BHGE plans to open the first phase of the facility at the end of 2019, and will reach full capacity by 2021 or 2022.
It will be an operational and service support facility and distribution centre with training capabilities. The company noted in a press release that this facility would contribute to the In-kingdom Total Value Add (IKTVA) localisation program “through partnerships with local suppliers and other businesses.”
“Developing in-kingdom competencies that will strengthen the pillars of Saudi Vision 2030 and support a robust oil and energy supply chain is a top priority for Saudi
“WE ARE BUILDING A WORLDCLASS ENERGY HUB THAT WILL ACCELERATE SOLUTIONS ACROSS THE VALUE CHAIN FOR GENERATIONS.”
Aramco,” said Mohammed Y. Al Qahtani, senior vice president of upstream at Saudi Aramco. “We encourage investments in localised infrastructure that will support our operational processes and also contribute to in-kingdom total value creation.
“BHGE’S new oilfield services facility is a significant step in this direction, which not only meets our operational needs but will also contribute to the larger Saudi economy through exports and job creation,” he added.
SPARK will have a comprehensive ecosystem with world-class infrastructure, logistics and a dry port, shared services, a commercial and residential area and highly specialised training centers.
The park essentially centralises localisation, and aims to build up the country’s energy infrastructure and supply chain. Saudi Aramco is key, and the company’s CEO Amin Nasser noted in a press release announcing the groundbreaking of the project that “Saudi Aramco continue[s] to be at the heart of the global oil and gas industry.”
Nasser also said that with SPARK’S anchor partners, “we are building a world-class energy hub that will accelerate solutions across the value-chain for generations.”
Indeed, the energy titan is a key motivation for suppliers to manufacture their products in Saudi Arabia; if suppliers and service providers want to do business with Saudi Aramco, they must abide by the In-kingdom Total Value Add (IKTVA) localisation program.
“SPARK is one of the country’s most ambitious projects, affirming the Kingdom’s commitment to Vision 2030 by creating thousands of highskilled jobs, serving as an economic catalyst and advancing Saudi Arabia’s strong position in the global energy sector,” said Khalid Al-falih, Saudi Arabia’s minister of energy, industry and mineral resources. “The energy park’s unique value proposition makes it an ideal destination for companies looking to invest in the thriving Saudi Arabian energy services market.”
SPARK was inaugurated in December
Saudi Crown Prince Mohammed bin Salman attended the inauguration
Saudi Energy Minister Khalid Al-falih is a key figure behind the localisation push