Saudi Focus

Aramco eyes industrial city

September 2015

State oil giant Saudi Aramco is considering whether to build a new industrial city in the south of the Al Ahsa district in the Eastern Province, as authorities seek to expand the kingdom’s industrial base, said a Reuters report quoting industry sources.

International engineering companies have already bid for engineering work, the sources added, declining to give details for commercial reasons. The report added that Saudi Aramco declined to comment.

One source said the new city would be built around energy-related industries, such as support services for power generation and transmission. Renewable energy such as solar may be included, he said.

If the project goes ahead, it will suggest that despite the plunge of oil prices since last year, which has slashed the revenues of Aramco and the Saudi government, authorities remain determined to invest heavily in long-term efforts to create jobs and diversify the economy beyond oil.

The creation of “industrial cities” – huge projects in which state institutions play key roles in planning and raising finance, but which seek to attract private investment – is part of the government’s efforts to jump-start development.

Among industrial city projects already under way are King Abdullah Economic City, a zone on the Red Sea coast near Jeddah. Its population of about 3,000 people is expected to roughly double this year and hit 50,000 by end-2020, rising to two million around 2035. Other industrial cities are at Jubail and Yanbu.

In 2013, Oil Minister Ali Al Naimi said Aramco was looking at such a project on the road from Dammam to Al Ahsa.

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