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South Korea: Saudi Aramco-Hyundai in $5.2 billion shipyard deal

2017/06/02

Saudi Aramco is to build the region's biggest shipyard in a $5.2 billion joint venture with South Korea's Hyundai Heavy Industries and others, the partners said on Wednesday.

The yard, to be constructed on the kingdom's Gulf coast, will have the capacity to produce four offshore rigs and 40 vessels, inclunding three supertankers, a year, the national-owned oil giant said in a statement.

Lamprell, a United Arab Emirates-based provider of services to the energy industry, and Bahri, the National Shipping Company of Saudi Arabia, have as well signed on to the venture.

"The integrated maritime yard will be the major in the region in terms of production capacity and scale," Saudi Aramco said.

Located in the new industrial port city of Ras Al Khair, the yard will as well provide maintenance services for rigs and vessels.

"Major production operations are expected to commence in 2019," with full capacity reached by 2022, Aramco said.

In a separate statement, Lamprell Plc. said the yard will cost an estimated $5.2 billion to build, of which roughly $3.5 billion will come from the Saudi government.

The rest will be funded by the joint venture.

It said the transaction was conditional on approval by its shareholders.

Saudi Arabia has launched a programme to diversify its industrial base next its revenues were badly hit by a 50 % fall in world oil prices since 2014.

Around five % of Saudi Aramco is to be floated on the stock market next year to help form the world's major national investment fund.

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