Jubail is one of the two industrial hubs of the Kingdom. It is petrochemical land. The idea of such an industrial city on the Gulf coast, north of Dammam originated in 1975. Thirty years on, it is set to expand its horizons with the coming of Jubail II, which promises to open a new chapter in the industrialization and growth of Saudi Arabia.
Custodian of the Two Holy Mosques King Abdullah (as the then crown prince) laid the foundation stone of Jubail II in December last year. Industry sources say that the new industrial park will attract national and international investment initially worth SR224 billion. It will be developed in four stages at an estimated cost of about SR13 billion and will house up to 22 new primary industries.
The project involves the expansion of King Fahd Industrial Port, pipeline refurbishment, increasing the capacity of the cooling system and new desalination plants.
Jubail II will proceed in four phases, with the initial phase accommodating nine industries and covering 1,900 hectares of the total 5,500-hectare development. Designs for infrastructure facilities, including tunnels, superstructures, pipelines and transport routes to the port were completed in 2004. The first phase will be finished by 2007 and the first industry may start production by 2009.
Most of the Jubail II site lies three kilometers west of the existing industrial park. The design team is sticking to the original master plan, building in open space that was set aside 30 years ago. Housing will be located within the Jubail Industrial City residential area, with plans to accommodate up to 50,000 additional residents by 2024.
In effect, the coming up of Jubail II will be the logical culmination of the plans prepared in 1975 in a bid to diversify the country’s economy.
The Royal Commission for Jubail and Yanbu was created in 1975 with then Crown Prince Fahd as chairman. The Jubail Master Plan was adopted two years later and the city has grown in size and economic importance ever since.
The initial plans for Jubail envisaged an industrial park covering an area of 102,000 hectares. The present city consists of 17 primary industries, 21 secondary industries and 132 supporting and light manufacturing industries. The industrial development required the world’s largest seawater cooling system, pumping more than one million cubic meters per hour. Today this demand is very effectively met by Marafiq, the power and water utility company in Jubail and Yanbu that was hived off from the Royal Commission.
The industrial plants, power sources, utilities, commercial ports and national airport were only part of the job. Bechtel was entrusted with the task of planning, managing and the constructing everything that today makes Jubail a community, including neighborhoods with greenbelts, a hospital, schools and mosques.
The first primary industry in the Jubail Industrial City, the steel mill, came on line in 1982. Today, refineries, petrochemical plants and more than a dozen industrial plants produce everything from petroleum to plastics. As a result, Jubail has reduced the Kingdom’s dependence on outside industries — one of the basic goals set out by the royal family in the early 1970s.
Jubail has also evolved into a major player in the international petrochemicals market, attracting top technical and business minds from 40 countries. Its residents attend two dozens schools, shop at 14 shopping centers and play golf at the Whispering Sands course.
Prince Saud ibn Abdullah ibn Thunayyan, chairman of the Royal Commission, which runs the twin industrial cities of Jubail and Yanbu, commenting on Jubail II said: “The new industrial city will attract local and foreign investments worth SR130 billion and create some 55,000 new jobs.” Jubail II is expected to provide enough room for industrial expansion for the next 25 to 30 years, he added.
The Royal Commission is to provide all the infrastructural facilities including roads, utilities (gas, electricity, seawater cooling, potable water, waste water treatment), feedstock and product pipeline corridor to the King Fahd Industrial Port as well as expanding the port itself; $3.8 billion has been allocated (SR14.25 billion) to fund the work. The utilities for the new industrial park will be extended from the existing park across Saudi Aramco’s 1.5-km wide Kuwait-Ras Tanura (KRT) corridor. Work is to start shortly.
Bechtel is managing and supervising the projects on behalf of the Royal Commission. Jubail II is expected to attract the same primary industries as Jubail I. Development of the first phase is expected to be completed by 2007. The subsequent phases of the project will be developed in line with demand for new sites.
The existing industrial city houses a number of major petrochemical plants belonging to SABIC. They include Jubail Petrochemicals Company (Kemya), Saudi Petrochemicals Company (Sadaf), the Arabian Petrochemicals Company (Petrokemya), the Oriental Petrochemicals Company (Sharq) and the Saudi-European Petrochemicals Company (Ibn Zahr).
Other major SABIC industries are: the Saudi Iron and Steel Company (Hadeed), the Saudi Methanol Company (Al-Razi), Jubail Fertilizer Company (Samad), the National Methanol Company (Ibn Sina), the National Industrial Gas Company (Gas), the National Plastics Company (Ibn Hayyan) and the Saudi Chemical Fertilizer Company (Ibn Al-Bytar).
Jubail I also houses non-SABIC companies such as Sasref (Saudi Aramco Shell Refinery), Marafiq, NPIC (National Petrochemical and Investment Company), SIPCHEM and Saudi Chevron Petrochemical Co. In addition to the above primary industries, there are several secondary and support industries in the city.
The advanced infrastructure of Jubail, which includes fail-safe power and utilities, is the cornerstone of Saudi Arabia’s industrial development. It has allowed the various industrial, commercial and social sectors to flourish in the city. A further key to the city’s success has been the liberal commercial and fiscal regime foreign investors have enjoyed there, which includes the right to wholly own businesses and property.
While there is a good argument for maintaining this exclusive arrangement and so focusing outside investment flows into a single location, there is also some virtue in proposals that this investment regime should be extended to the whole Kingdom, sooner rather than later. Since the country has now joined WTO, which requires that these same regulations be applied everywhere else, Jubail’s uniqueness in this matter will presumably soon become a thing of the past.
Last February, Prince Saud ibn Abdullah ibn Thunayan, chairman of the Royal Commission, signed a contract with Abdullah ibn Abdul Mohsen Al-Khudairy & Sons to carry out works on the second industrial city.
The city that was once simply famous for its pearl fishermen has become the pearl in the Kingdom’s industrial crown, symbolizing government’s vision of Saudi Arabia’s future development.
