Italy’s Saipem has signed a deal with Saudi Aramco and domestic player Nasser S Al Hajri Corporation (NSH) for the national engineering, procurement and construction (EPC) champion initiative that aims to increase local participation in projects, as a part of Saudi Arabia’s Namaat programme.
Saipem said on Thursday that the agreement is meant for “the execution of onshore EPC projects in the kingdom by a newly established entity, to be incorporated by Saipem and NSH in Saudi Arabia”.
“The initiative follows the MoU (Memorandum of Understanding) signed and announced in September 2021, under Aramco’s Namaat Investment Industrial Programs, focused on building national champions, creating a robust industrial ecosystem and introducing unique job opportunities,” Saipem added.
The Italian company said the EPC National Champion joint venture is expected to be established by the end of 2022.
Increased local content
Aramco’s IKTVA (in kingdom total value add) localisation programme is a key part of its strategy to ramp up local investments in crucial EPC projects by 2030.
Leading international EPC giants operating in Saudi Arabia are increasingly scaling up their local capabilities, in tune with the IKTVA scheme, Upstream understands.
Saipem said it has a “long-running collaboration” with Aramco that includes the execution of a wide set of activities, from onshore and offshore engineering and construction to drilling activities, with onshore and offshore rigs.
The company is also a key part of Aramco’s offshore long term agreement (LTA) with international contractors or consortiums.
Saipem was recently awarded a quartet of offshore contracts from Aramco worth $650 million to perform EPCI work on its oil and gas fields.
South Korean joint venture
In addition to Saipem, South Korea’s Samsung Engineering recently signed a deal with Aramco for the national EPC champion initiative.
As a part of the newly signed agreement, the South Korean player plans to establish a joint venture with a leading local contractor Al Rushaid Petroleum Investment Company (ARPIC), with an objective of “increasing Saudisation levels, maximising In Kingdom Total Value Add (IKTVA) targets and deploying leading construction technologies,” it said.
The company added that ARPIC has multiple collaborations in the oil and gas industry, including joint ventures and affiliates in the areas of manufacturing, construction and engineering.