The Samba report said work on the Gas Initiative has made strides too.
This involves exploration for gas in Aramco's joint ventures with several foreign oil and gas companies, with
the intention of supplying gas for local industrial use and power
generation, eventually freeing up more crude oil for export. Companies
involved in the development include Shell, Total, Russia's Lukoil,
China's Sinopec, and Repsol of Spain. Total cost of the Gas Initiative
is currently estimated by Aramco
to be SR41.25 billion ($11 billion).
MEEF - Middle East Engineering Projects News & Releases
According to Samba Financial Group's mid-year report about the Saudi
economy, which was released last week, the total cost of projects
currently under way or in advanced planning for execution over the next
several years is about SR1.06 trillion ($283 billion). Alone, the oil
and gas industry is undertaking about SR259 billion ($69 billion), or
one fourth, of the total.
Saudi Arabia Embarks on New Mega Projects
Courtesy: Arab News -
JEDDAH, 31 July 2006 — Saudi Arabia is embarking on a number of new
mega-projects in a wide range of industries. The bulk of them are
focused on those sectors of the economy in which the Kingdom has
comparative advantages — oil and petrochemical industries. Saudi Aramco's program to expand crude oil production
capacity has been underway for a few years.
Defense and security purchases projects total SR183 billion ($48.8
billion), accounting for 17 percent of the total. Large real estate
developments capture about SR150 billion ($40 billion), or 14 percent of
the total investments, followed by mining and minerals development with
SR44.63 billion ($11.9 billion) of the total. Other small projects
include public utility projects such as electricity, water, and
"In contrast with the previous periods of intense infrastructure and
project activity, much of the current development is financed and owned
by the private sector," Samba Financial Group's General Manager and
Chief Economist Brad Bourland said.
According to Samba estimate out of the total SR1.06 trillion in total
project costs, some SR322 billion ($85.8 billion) or 30.3 percent of the
required funding will come from the general government budget. Aramco's project bill amounts to SR304 billion
($81 billion) or 28.6 percent, but some of this is in joint venture with
private companies. Petrochemicals giant Saudi Basic Industries Corp. (SABIC)
needs about SR102.37 billion ($27.3 billion) to fund its current and
future mega projects through 2010. Three mega projects initiated by the
investment promotion arm of government, Saudi Arabia General Investment
Authority (SAGIA), including SR100 billion ($26.7 billion) for King
Abdullah Economic City in addition to two other private projects (an
aluminum smelter and an oil export refinery) total SR180 billion ($48
The Royal Commission of Jubail and Yanbu will require about SR150
billion $40 billion through 2010, much from private sector investment,
mainly for new projects and for the expansion of existing infrastructure
at Jubail Industrial City-1 and Jubail Industrial City-II.
Some of the mega projects include:
The SR100 billion King Abdullah Economic City in Rabigh.
The $10 billion Aramco-Sumitomo
Chemical refining and petrochemical joint venture called Petro-Rabigh,
collocated with the King Abdullah Economic City
The SR37.5 billion Aramco-Total
The SR22.5 billion Aramco-ConocoPhillips
SABIC's Saudi Kayan Petrochemicals
Maaden's Ras Al-zour Mining Industrial City and
The Saudi Land Bridge project, aimed at connecting various parts of the
Kingdom by rail.
The largest private sector investment in Saudi Arabia will be the King
Abdullah Economic City which will be developed by Dubai-based Emaar Properties in
collaboration with Aseer and Binladen Group of Saudi Arabia in a joint
venture called Emaar
the Economic City.
The two similar projects recently announced include the Prince Abdulaziz
bin Musaad Economic City in Hail and the Knowledge City in Madinah.
Work continues on Aramco's $20 billion
Crude Oil Expansion Program, which aims at raising Saudi oil production
capacity from the current 11.3 million bpd to 12.5 million bpd by 2009.
This is the most costly expansion by Aramco
in many years.
signed joint venture agreements with Total of France and ConocoPhillips
of the US to set up two export refineries, one on each coast, that would
cost SR22.5 billion ($6 billion) each.
Both refineries, which will produce mainly gasoline for export will use
the Kingdom's heavy crude oil, which is less sought after by
international buyers. Terms of the two preliminary agreements are almost
identical. Each of the joint venture partners will hold a 35 percent
equity stake and the remaining 30 percent will be offered for public
supply crude, and the foreign partner will market the refined products.
Locations of the two refineries are Jubail on the east coast for the Aramco-Total
Export Refinery and Yanbu on the west coast for the Aramco-ConocoPhillips
export refinery. For Saudi Arabia, the two locations will contribute to
balanced regional development and maintain flexibility of export routes
— one on the Red Sea and one on the Arabian Gulf.