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King Salman at the opening in Al Jouf with Crown Prince Mohammed.

Saudi King launches $23bn mega city for mining sector

JEDDAH (Saudi Arabia), November 22, 2018

Saudi Arabia’s King Salman today (November 22) inaugurated the Phase One of Waad Al Shamaal, a SR85-billion ($23 billion) mega city for mining industries which will come up over a sprawling 440-sq-km area in the country’s northern region.

The inauguration of the Wa’ad Al Shammal marks a major milestone in Saudi Aramco’s long-term strategy to increase gas supply in support of the Kingdom’s economic diversification program to generate growth in new sectors, said a top official.

The inauguration was witnessed by royal dignitaries, ministers, officials and corporate sector leaders with a delegation from Saudi Aramco led by President and CEO Amin Nasser.

Wa’ad Al Shamal (arabic for Northern Promise) will be a new industrial city located 30 km west of Turaif. With several phosphate processing facilities, it is set to become a major mining hub.

Wa’ad Al Shamal will help increase economic and industrial activity in the northern region of Saudi Arabia. Developing new mining and mineral activities, especially phosphates, and downstream value added industries such as glass and plastic manufacturing, said a statement from Saudi Aramco.

Mining is key to the kingdom’s reform plan to diversify its economy away from hydrocarbons, as the government aims to more than triple this sector’s contribution to the nation’s economic output by 2030.

It is estimated that Wa’ad Al Shamal will generate SR24 billion from non-oil sectors and contribute 3 per cent to the kingdom’s Gross Domestic Product.

About 30,000 jobs are expected to be created for qualified Saudi youth, especially those from the region, said a top official.

"The launch of Wa’ad Al Shamal by King Salman represents an important advancement and a key milestone in our journey toward diversifying the economy and in making Saudi Vision 2030 a reality," remarked Saudi Aramco President and CEO Amin H. Nasser.

"The Northern Promise can be a prime catalyst in creating transformational industries that can generate more growth and more value from niche manufacturing sectors such as manufacturing glass, glass fibers, plastics and solar panels," he stated.

Delivering on its promise to fuel industries in the northern part of the kingdom, as it is presently doing in developing the Jazan Economic City in southwestern Saudi Arabia, Saudi Aramco began commercial production of unconventional gas in the North Arabia Field in May this year, supplying 55 million standard cu ft per day (MMscfd) to a local power plant.

The gas production will ramp up to 190 MMscfd toward the end of 2018 to meet customers’ needs, said Nasser.

"What we see now at Wa’ad Al Shamal city is the productive outcome of close collaboration between government sectors, agencies and leading national companies. I am proud of Saudi Aramco’s role in this achievement, making an investment of more than SR10 billion to supply the required energy feedstock to the city and its projects," he added.

Wa’ad Al Shamal is 1,000 km away from Riyadh and supplying the city with competitive gas feedstock was initially deemed as complex and costly due to its terrain and geography.

However, Saudi Aramco came up with a creative and efficient solutions to explore and drill for gas resources in the region, specifically unconventional gas.

With foresight to foster human resources and support the national goal of creating additional job opportunities in the northern part of the Kingdom via the establishment of Wa’ad Al Shamal, Saudi Aramco reached out to schools in nearby cities and villages to promote upcoming opportunities with the company for high school graduates, such as the Apprenticeship Program for Non-Employees.

The prospect for a 100 per cent Saudi workforce, primarily from the North, is very high with the upcoming employment opportunities in line with the region’s growth.

Commercial production of natural gas signifies the first milestone in Saudi Aramco’s implementation phase of the unconventional resources extraction programme, said a senior official.

"Building on three crucial pillars of a sound de-risking strategy, a fit-for-purpose business model, and the building of capabilities in people and technology, the company’s unconventional resources (UR) organization has made significant achievements over the past few years," remarked Khalid M. Al Abdulqader, Saudi Aramco’s general manager of Unconventional Resources.

"The gas supply to support Wa’ad Al Shamal industrial projects will also help offset the increase in liquid burning for electricity in the area," he stated.

Abdulqader said the UR organisation has completed drilling wells, installing more than 300 km of pipelines, and building one surface processing facility (SPF) along with associated infrastructure, while the remaining four SPFs will come online by the year-end.  

He pointed out that producing unconventional gas near Turaif will replace the burning of hydrocarbons for electricity generation.

The result will be a reduction in carbon emissions while saving hydrocarbons for export to obtain higher value, he stated.

The project’s best practices and experiences will benefit teams developing the remaining unconventional resources in the Kingdom, including the South Ghawar and Jafurah fields. In line with Saudi Vision 2030, these endeavors will contribute to increase the Kingdom’s natural gas production, he added.

The project is being developed in two phases with Phase One worth SR55 billion being inaugurated today.

In the past two months, the king has visited a number of major cities, announcing projects and initiatives to develop the kingdom in line with Vision 2030, a broad strategic plan to diversify the country's economy and end its dependence on oil revenues.

King Salman last evening unveiled projects worth over SR10.5 billion at Arar in the Northern Border Region as part of his multi city-tour of Saudi Arabia.

Earlier on Tuesday, he had inaugurated 242 development projects worth SR10 billion in the northern Al Jouf province, in the presence of Crown Prince Mohammed bin Salman, Interior Minister Prince Abdul Aziz bin Saud bin Naif, Cultural Minister Prince Badr bin Abdullah bin Mohammed bin Farhan and Al Jouf Governor Prince Badr bin Sultan bin Abdul Aziz, said the Saudi Press Agency (SPA).

A total of 21 projects will be implemented by the Ministry of Health, 77 covering the key sectors of energy, industrial and mining sectors besides water and agriculture, it stated.

King Salman later inaugurated several development projects including 20 road projects worth SR628 million in the region, said the Arab News report.
The work involves addition of lanes to other roads, and construction of secondary roads and junctions on existing roads, it added.

Tags: Mining | Saudi King Salman | mega city |

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