DAMMAM, 21 November 2006 — Saudi Arabia is opening up its refining sector to private capital investments, an official of the Ministry of Petroleum and Mineral Resources told the Saudi Energy Forum yesterday on its concluding day.
The Saudi private sector, in association with international partners, has been invited to participate in a proposed oil refinery in Jizan.
Announced by Custodian of the Two Holy Mosques King Abdullah, the proposed refinery in the underdeveloped Jizan area will have a capacity of between 250,000 and 400,000 barrels per day and will be integrated with a petrochemical or an electricity generation unit. The ministry has already commissioned a feasibility study for the oil refinery.
The National Industrial Cluster Development Program was also unveiled at the forum. The Supreme Economic Council (SEC) has already approved the project. The idea of cluster development is to give a boost to the nonoil GDP of the Kingdom, which is currently well below the international average. The program aims to boost the industrialization efforts in the country, generate gainful employment for its people and substantially increase the nonoil-related GDP of the Kingdom.
Giving out details of the National Industrial Cluster Development Program (NICDP), Azzam Shalabi of the Ministry of Petroleum and Mineral Resources said that 18 projects have been short listed. The selection, picked from hundreds of proposals, was based on locally available resources and skills. These 18 different manufacturing activities were then clustered into four groups: automotive, construction, appliances and metal processing.
Participants of the forum said the NICDP could prove to be a revolutionary program that would help diversify Saudi industry.
In view of the interest shown by investors, the Jubail-2 industrial zone has been expanded further to accommodate most of those interested, said Faisal Rasheed, of the Royal Commission for Jubail and Yanbu. He said that both Jubail-2 and Yanbu-2 are on target to accommodate industries under the newly unveiled NICDP.
While talking to the press after the forum, Prince Faisal ibn Turki, adviser to the Ministry of Petroleum and Mineral Resources, asserted that despite all talks of feedstock shortage for the petrochemical industry in the Kingdom, all the projects discussed during the conference have received their allocations.
He also underlined the fact that low feedstock pricing to petrochemical ventures in Saudi Arabia is due to the low production cost of feedstock here.
The conference came to an end late in the evening with a session on energy support services required and another on financing for hydrocarbon chain projects in the Kingdom.
The three-day mega conference and exhibition, organized by the Ministry of Petroleum and Mineral Resources and the Eastern Province Chamber of Commerce and Industry in conjunction with CWC Associates Ltd was inaugurated by the Governor Eastern Province Prince Muhammad ibn Fahd on Saturday evening.