Saudi Arabia continues to power toward the goals set out in its transformative Vision 2030 economic road map with the recent announcement of an official endorsement by the Custodian of The Two Holy Mosques, King Salman ibn ‘Abd Al-‘Aziz Al Sa’ud, of the naming of King Salman Energy Park (SPARK) in the Kingdom’s Eastern Province.
With Saudi Aramco as the main anchor tenant in the park, the project will create a global industrial hub for energy-related manufacturing services and is expected to attract some of the world’s biggest — and most innovative — energy industry names.
In line with the goals of Vision 2030, SPARK will create tens of thousands of direct and indirect jobs for local communities while serving as an economic catalyst.
SPARK will offer a comprehensive ecosystem comprising of a world-class infrastructure, logistics and a dry port, shared services, a commercial and residential area, and highly specialized training centers.
Strategic Location
An educational campus will be a central feature
of SPARK as it grows. It is expected that the
mega-project will reach full maturity by 2035.
SPARK will be constructed at a strategic location between the Eastern Province cities of Dammam and al-Hasa, allowing easy access to a large pool of local manpower.
This strategic location will also enable companies established in SPARK to supply the whole region’s demand for energy goods and services related to five industrial focus areas, including upstream, downstream, petrochemicals, power, and water. These focus areas have common commodities and services which, when aggregated, will create significant investment opportunities due to healthy demand.
Site preparation for phase 1 started in September of last year and the architectural design for the whole project is now 20% complete. It is expected that land will be released to early tenants in the 3rd quarter of this year and the construction operations for the whole of the 1st phase will end in 2021.
Construction work for the infrastructure and other facilities will begin in the 2nd half of this year.
Developing a more stable energy sector
HE Khalid A. Al-Falih, Minister of Energy, Industry and Mineral Resources, Chairman of the Saudi Aramco Board of Directors, and the Chairman of Saudi Authority for Industrial Cities and Technology Zones, said that the project is a response to Vision 2030 requirements, pertaining to enhancing economic diversification, supporting the private sector, and pressing ahead with efforts to develop the energy sector. This will help develop a more stable and secure business ecosystem that will support efforts to achieve the desired growth targeted by such projects, the minister added.
Once wholly developed by 2035, the city will contribute SR22.5 billion annually to the Kingdom’s gross national product (GDP) and help localize more than 300 new industrial and service facilities in support of world-class innovation, development, and competition, Al-Falih said.
Localization of the energy industry is a top priority that requires the development of facilities such as King Salman Energy Park to capitalize on Saudi Aramco’s global leadership and expertise in the oil and petrochemicals sectors while also developing other complementary sectors, said the minister.
“Developing the oil and gas industry, localization of renewables, and increasing energy sector competitiveness are some of the strategic goals of the National Transformation Program 2020, which we endeavor to achieve through such highly value-added projects,” said Al-Falih.
These projects, he added, support national companies and small- and medium-sized enterprises, as well as create an attractive environment for foreign and domestic investors, and increase their confidence in the Kingdom’s economy.
A Mega-project in Three Phases
A big attraction at SPARK for inward energy
investors is access to best-in-class infrastructure,
including a dry port.
The total area of the energy park is planned to be more than 50 square kilometers and will be developed in three phases, expected to be completed by 2035.
Already, names synonymous with the energy sector, including Schlumberger, Baker Hughes-GE, and Oilfields Supply Company Saudi, have signed Memorandums of Understanding with Saudi Aramco — signaling their intention to locate at the park.
As it expands its manufacturing base within the Kingdom, Schlumberger will develop an industrial manufacturing center over 500,000 square meters on land allocated for energy-related industries.
The first phase is planned to be completed in the second quarter of this year, which will bring Schlumberger land rig manufacturing to the Kingdom of Saudi Arabia.
SPARK will also cultivate and nurture small- and medium-sized enterprises while also stimulating innovation and entrepreneurship in the energy sector — significantly contributing to a diversifying economic landscape.
Establishing the Kingdom as a strategic energy investor
Saudi Arabia’s Vision 2030 was launched by King Salman two years ago as an ambitious program of social and economic reform that will see the Kingdom enter a fresh era of progress and prosperity, with detailed plans to diversify the economy through reducing dependency on oil, boosting foreign direct investment, and developing various sectors.
In alignment with that vision, SPARK, after reaching full maturity, will add significantly to the Kingdom’s GDP.
Saudi Aramco president and CEO Amin Nasser said: “Enabling Saudi Arabia to establish itself as a strategic energy investor, SPARK will participate in the development of the private sector, particularly the companies engaged in the Kingdom’s globally and regionally competitive energy support industries and services.”
Nasser pointed out that SPARK is a mega-project with a globally designed model environment to attract investors through common interest oriented commercial arrangements. Participating in the development of support industries and the localization of energy supply chain, the model constitutes both a strategic goal and cornerstone for the In-Kingdom Total Value Add Program (iktva), launched three years ago by Saudi Aramco with a mission to double domestic content by 2021.
“Saudi Aramco will capitalize on its broad expertise in supply chain and project management to ensure that crude oil, gas and chemicals projects generate sustainable economic benefits for the Kingdom. SPARK will enhance investment in the most important asset — namely, Saudi youth, male and female — as iktva provides job opportunities and state-of-the-art training programs for them,” he added.
Ease of Business
A digital rendering of what a typical industrial
subdivision at SPARK will look like. SPARK takes a
“clustering” approach, which places businesses
relevant to each other in close proximity.
SPARK will be clustered by function and will be engineered for geographic and value chain efficiency in a purpose-built fully integrated environment.
It is anticipated that tenants will be attracted by the unrivaled location at the heart of the region’s energy economy, the value chain integration, world-class infrastructure and services, and the proximity to a sustainable market demand.
It is also expected that SPARK will bring about a desirable “work, live and play environment” for energy support companies, their employees, and their families — attracting the best in local and global talent.
Residential spaces will be developed alongside commercial activities as SPARK matures.
A key element of the SPARK value proposition is a comprehensive set of services that will be delivered to customers — starting from initial inquiry through to operations at the site. This one-stop shop platform will initially be established as an online portal to service customers worldwide, and be expanded as the project develops.
“The King Salman Energy Park will be a world-class industrial park for the companies serving the localization of the Kingdom’s energy sector,” said Abdulaziz A. Al Abdulkarim, Saudi Aramco’s vice president of Procurement and Supply Chain Management. “It will provide all the services and logistics required for its tenants. It will also support Saudi Aramco and our suppliers to achieve their iktva goals in alignment with the Kingdom’s Vision 2030.”
Fahad E. Al-Helal, vice president of Project Management, said SPARK will emerge as a “key enabler” for the Kingdom.
“Presently, the Kingdom’s requirement for energy-related industries is growing and requires dedicated industrial development focused on the energy sector,” said Al-Helal.
“SPARK will provide for the development of a world-class energy industry hub for support industries directly related to the energy sector. The demand growth projected for the next 10 years for industrial land required for small- and medium-sized industrial enterprises is expected to exceed supply.
“SPARK will be developed as a key enabler to create a vibrant Saudi energy sector to accelerate localization and create tens of thousands of direct and indirect jobs.”