The global EPC services provider plans to construct the new complex to increase its abilities to service its growing Middle East and Caspian markets
McDermott International (MDR) has signed a memorandum of understanding (MoU) with Saudi Aramco for a long-term land lease to build a new fabrication and marine complex at the King Salman International Complex for Maritime Industries and Services in Ras Al Khair, currently being developed by Aramco.
With a long-term phased approach, McDermott plans to construct the new complex, which is expected to use state-of-the-art facilities, increased automation and an optimised layout to increase McDermott’s abilities to service its growing Middle East and Caspian markets.
The future fabrication facility at Ras Al Khair is expected to provide up to 16-million manhours of capacity, up from 8-million manhours at McDermott’s current Jebel Ali facilities, with a gradual transition from McDermott’s operations in Jebel Ali expected by the mid-2020s, an MDR statement said.
The Ras Al Khair project is part of Saudi Aramco’s plan to expand its local supply chain, which will improve the company’s agility while driving additional economic and human capital development, as well as new employment opportunities in Saudi Arabia in support of the goals of “Vision 2030”, said an Aramco statement.
MDR is a leading provider of engineering, procurement, construction and installation (EPCI) services for offshore developments worldwide, with over 55 years of experience in the region and in working for Saudi Aramco. The selection of MDR was the result of a rigorous evaluation process which followed extensive negotiations with several world-class players in the offshore EPCI services field, said the statement.
The project aims to create a world-class provider of offshore EPCI services throughout the Middle East and regional markets. It will build on the existing relationship between Saudi Aramco and MDR to localise this part of the supply chain, which would improve efficiency while increasing local content, export of energy goods and services, and further development of the kingdom’s economy, it said.
In this context, the project’s key business principles are focused on the following:
• A strategic, phased transition of MDR’s regional business operations to Ras Al Khair according to a planned timetable – including building a new fabrication and marine complex expected to use state-of-the-art facilities, increased automation and an optimised layout; and
• High level of Saudisation of employee headcount across all functional areas of the organisation, and associated increased scale of training and talent development in Saudi Arabia; and support localising the supply chain to the greatest extent possible including supplier development to increase availability of local content and further diversification in Saudi Arabia.
“We are excited about this strategic move and believe it expands and strengthens our ability to service all our growing Middle East markets and our decades-long leadership position with Saudi Aramco and in the Middle East,” said David Dickson, McDermott’s president and chief executive officer, in another statement.
“When we look at our next 50 years of business in the Middle East, we see strong benefits to moving our business operations to Saudi Arabia, including the opportunity to modernise our facilities, move closer to Saudi Aramco and other key customers in the region as well as provide McDermott’s world-class training programmes to Saudi Arabia’s talented workforce to further enhance McDermott’s Middle East operations.”