According to a recent report, Saudi Arabia is expected to invest nearly SAR22bn or $5.86bn in a project to build a shipyard to construct large vessels for its oil industry. Yes, you read it correctly – $5.86bn!
The project in the Eastern Saudi port of Ras Al-Khair will be a joint venture between state oil giant Saudi Aramco, the National Shipping Company of Saudi Arabia, the UAE-based Lamprell and South Korea’s Hyundai Heavy Industries, Arabic daily Aleqtisadiah reported.
Despite the regional oil and gas sector heavily curtailing spending, logistics and storage continues to be one of the few areas of investment, where NOCs in particular are pooling funds in order to efficiently store their (enormous) produce and export it to customers in the minimum time.
The global oil industry, which is worth trillions of dollars, gets 80% of its revenues from the sale of fuels. It needs to further diversify into adjacent areas, however, to counter a serious threat from alternative fuels and battery technologies, according to a report from Lux Research.
You might remember that in February this year, His Highness Sheikh Mohammed Bin Zayed Al Nahyan led a UAE delegation that signed several crucial deals with India, among which was a deal from ADNOC to use India’s multiple and upcoming storage facilities for strategic reserves, in return offering New Delhi the privilege of using about two-thirds of the stored oil for free.
The move is testament to the huge importance the region’s energy sector attaches to the midstream segment and its development. In times like these, when the Middle East’s oil and gas producers are engaged in a stiff contest for a bigger share of the fossil fuel consumer market – both among themselves and with global players – those that possess market leading storage, handling and transportation capabilities will emerge victorious.
As the global demand for natural gas rises due to multiple factors, and producers scramble for market share, building and expanding LNG terminals has become more crucial than ever.
A case in point is Qatar’s RasGas, our Knowledge Partner, which has thrived on its excellent LNG handling and ferrying capabilities to win buyers from Asia to India and Europe. Its giant storage tanks, combined with a fleet of ships, tells you how far a state-owned company – with above par midstream credentials – can go.
