Saudi Energy Minister Khalid Al-Falih has said the newly approved industrial energy city project will help localise industries supportive to the energy sector.
He said the decision to establish a new energy city aligns with the ambitious goals set out in the Vision 2030 policy and supports vital infrastructure in the Kingdom.
In a statement issued late on Saturday, Saudi Aramco said that the first phase of the energy city would be completed in 2021, according to the Arab News daily.
The city, which will be developed over 50 square kilometres (sqkm) of land allocated for energy-related industries, will complete its first phase that covers almost 12 sqkm by that date.
The Cabinet has approved a proposal put forward by Saudi Aramco for the establishment of a company in the Eastern Province to undertake infrastructure development for the industrial energy city and another company to operate and maintain the city. The new project will generate thousands of direct and indirect jobs and annually add an estimated $6bn to the Kingdom’s gross domestic product (GDP).
Amin Nasser, chief executive of Saudi Aramco, said the new energy city would be a milestone in efforts to localise industries and services related to energy.
The city will create an ideal and integrated environment to attract global investments; establish and develop a large number of small- and medium- enterprises (SMEs); and stimulate innovation and entrepreneurship, the Aramco chief executive said.
The city will be located between Dammam and Al-Ahsa, at the heart of the Kingdom’s energy operations. Ghawar, the world’s largest onshore oilfield is near Al-Ahsa.
The Saudi Industrial Property Authority (MODON), which develops industrial cities in Saudi Arabia, has started to chalk out plans and programmes with Saudi Aramco to develop and operate the city, the statement added.
Khalid Al-Salim, acting director-general of MODON, said the management of the new energy city will be jointly carried out by Saudi Aramco and Modon.
The project will support Saudi Aramco’s operations, will cut costs of products and services, and meet the needs of the oil giant’s operations, the statement said.
It will also provide drilling, exploration, production services and pipe manufacturing.
Saudi Arabia is trying to lower dependence on oil and establish new industries to expedite job creation for a rapidly rising young population.
It plans to list in stock markets up to 5% of its shares in Aramco, which will help it invest in other sectors to generate more revenue streams.