Saudi Aramco trading arm hiring staff for Singapore push

Saudi Aramco announces plans to build the Persian Gulf's largest shipyard through a joint venture with three companies, including London-listed Lamprell (OTCPK:LMPRF), which surged the most in two years before settling for a 5.7% advance.

Hyundai Heavy Industries Co.'s mega project to establish a ship fix and shipbuilding joint venture in Saudi Arabia has gathered pace by signing a shareholder agreement with key business partners, including Saudi Aramco, industry sources said Thursday.

Although Lamprell has three yards and a four-decade history at its base in Sharjah in the United Arab Emirates, Wednesday's announcement will give it a presence in neighboring Saudi Arabia, the world's largest oil exporter.

"The integrated maritime yard will be the largest in the region in terms of production capacity and scale", according to Aramco's statement.

Located in the port city of Ras al-Khair, the yard will also provide maintenance services for rigs and ships.

Hyundai will be technical partner for the zones that will construct and undertake MRO services for offshore support vessels and that will construct commercial vessels. The deal involves the supply of 20 jack-up rigs to the state-controlled run oil behemoth over a period of 10-years, in addition to the provision of maintenance, fix and overhaul services. The government's Saudi Industrial Development Fund has agreed to provide a debt facility worth about $1 billion.

Christopher McDonald, chief executive of Lamprell, described the firm's involvement in the deal as "transformational".

"This strategic partnership among industry leading companies is positioned to capitalize on the rapidly-growing maritime requirements in the region by offering globally competitive, safe, high quality and on-time solutions to customers", says Saudi Aramco.

Works on the localization of Saudi Aramco's supply chain related to offshore drilling and shipping activities, the initiative is expected to optimize costs, improve rapid responses between Saudi Aramco and affiliates.

The agreement, which was first put forward in a memorandum of understanding (MoU) signed in January 2016, will see the partners establish the King Salman International Complex for Maritime Industries & Services.

  • Leroy Wright