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March 27, 2019

McDermott and Saudi Aramco sign lease for fabrication facility

A subsidiary of McDermott International has signed a lease agreement with Saudi Aramco to establish a fabrication facility in Saudi Arabia.

A subsidiary of McDermott International has signed a lease agreement with Saudi Aramco to establish a fabrication facility in Saudi Arabia.

The agreement awards a lease to McDermott Arabia Company to build the facility that will be dedicated to large scale fabrication of offshore platforms and onshore/offshore modules. This follows a Memorandum of Understanding signed between the parties in March 2017 to build a new fabrication and marine complex.

Pursuant to the deal, the proposed engineering, procurement, construction and installation (EPCI) facility will be located within the King Salman International Complex for Maritime Industries in Ras Al-Khair. Spread over an area of around 1,150,000m², the fabrication facility is expected to have a throughput capacity of more than 60,000 metric tonnes per year.

McDermott also plans to set up a new marine base in the Eastern Province to support the installation of offshore platforms, subsea pipelines and cables, skids, and associated structures and assemblies. Other plans include expansion of the company’s engineering and procurement offices in Saudi Arabia to improve its project execution capabilities.

The deal will allow McDermott to enhance its abilities to serve its customers in offshore and subsea markets throughout the Middle East, Caspian and other markets in the Eastern Mediterranean Sea and offshore India and East Africa.

Saudi Aramco Technical Services senior vice-president Ahmad Al Sa’adi said: “This facility will serve as a major EPCI hub for not only the Kingdom, but for the Gulf Cooperation Council (GCC) region.”

“This facility will serve as a major EPCI hub for not only the Kingdom, but for the Gulf Cooperation Council region.”

McDermott Middle East and North Africa senior vice-president Linh Austin said: “We will establish a world-class fabrication facility that enables us to better serve the needs of Saudi Aramco and other customers in Saudi Arabia and across the region.”

Saudi Aramco New Business Development vice-president Mohammad Al Assaf noted that the establishment of the facility in Saudi Arabia will support the country’s efforts to diversify its economy and drive localisation.

As part of Saudi Aramco’s In-Kingdom Total Value Add (IKTVA) initiative, McDermott will work in partnership with the company to conduct apprenticeship and training programmes to local people.

The companies expect to bring the facility on stream by 2022.

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