Category Archive: Pipeline
Aramco Asia recently inaugurated Aramco Asia Singapore as part of its ongoing expansion in Asia.
The office in Singapore has been established to provide crude oil marketing, material sourcing, supply chain logistics, inspection and other engineering services.
Ahmed Al-Subaey, executive director of Marketing, Supply and Joint Venture Coordination, officiated the inauguration ceremony.
“The Asia region is the world’s largest growth center for energy demand and a major source of the materials, equipment and services that are critical to our global operations,” said Al-Subaey. “We are confident that the expansion of our office in Singapore will enable us to leverage the growth and opportunities in this region while continuing to serve our customers’ needs with the level of excellence that they have come to expect from Saudi Aramco.”
Asia is the company’s biggest crude oil and products market with 60 percent of Aramco’s crude oil being exported to Asia. Aramco Asia currently has six offices in China (Beijing, Shanghai and Xiamen), Japan, Korea and Singapore.
“Asia is a key strategy and focus for us as part of our transformation efforts to become a leading global and integrated energy and chemicals company by 2020. Following the launch of Aramco offices in China and in Korea two years ago, we are very pleased to continue our expansion in Asia with the latest addition of Singapore,” said Ibrahim Al-Buainain, president of Aramco Asia.
The company’s presence in Singapore dates back to 1993, when a representative office was set up in Singapore to provide marketing services to promote sales and develop new markets for Saudi crude oil and refined petroleum products in the Far East region.
“The company is committed to Singapore and this region,” said Fouad Al Rammah, acting directory of Aramco Asia Singapore. “The inauguration of Aramco Asia Singapore underlines the importance of Singapore as the region’s premier hub for oil and gas, as well as a regional base for the Southeast Asia region.”
The Saudi Aramco Entrepreneurship Center has pledged to help the Kingdom diversify its economy. This pledge is beginning to take shape as they train Saudi university graduates on how to use their innovative ideas to become future entrepreneurs and business leaders.
The Entrepreneurship Center’s Co-op-to-Entrepreneur (C2E) program helps Saudi entrepreneurs take their ideas to the marketplace, an effort that will help in the creation of small- and medium-sized enterprises. This will increase the number of companies that can create jobs for Saudi Arabia’s growing young workforce while giving Saudi graduates a new range of options that allow them to shift from becoming job seekers to job creators.
On the campus of King Fahd University of Petroleum and Minerals (KFUPM), the C2E program provides a classroom setting where university students from across the Kingdom receive help in incubating groundbreaking business ideas in the StartUp Lab.
Some students have managed to move quickly from mere business proposals to cash-positive companies within the 10-week C2E program.
“There are two programs here,” said Ted Randall, manager of the StartUp Lab. “One is a business incubator where entrepreneurs come in with an idea, and we provide them with office space, computer hardware and software, special coaching and mentoring, financial planning and even seed funding to help them launch their ideas.
“The second is the C2E program, a 10-week course for taking co-op students and putting them into an intense accelerator course,” Randall said. “The idea is to have a business ready to launch by the end of the course.”
The most recent class, composed of 12 students from KFUPM, King Saud University and Jazan University, generated three startups, one of which continues to operate as a cash-positive business.
Another startup that has made it through the incubation process and is ready to launch is Waki. Founded three months ago by a trio of students from KFUPM — Abdulaziz Alzahrani, Osama Al-Najjat and Ali Busaleh — Waki is a Web-based reservation service for private soccer fields. In the past, athletes taped their names and phone numbers on the gates of soccer fields to reserve them. Now, through Waki, they can reserve fields online. Waki has handled 7,000 reservations at KFUPM as they developed and improved their concept and is being launched to the public. Mohammed Al-Hashim is another C2E student who formed a company, and that company is already generating revenue. Founder of GyptechIT, an IT firm that installs and manages security camera systems for companies as well as providing IT support, Al-Hashim says that he started out with nothing but an idea.
“Saudi Aramco’s C2E program took me from zero and provided me with training on the business side and incubated us for a time so that we were able to generate revenue and become more organized and do our business in a more innovative way,” Al-Hashim said.
He said that the hardest part for him, as a software engineer, was to figure out how to market his product and how to let businesses know what his company could do for them. C2E facilitators helped him get in touch with a Riyadh-based tech business owner, who gave him useful advice on how to handle marketing.
The StartUp Lab and its C2E program is just one of the Saudi Aramco Entrepreneurship Center initiatives to supporting growth and diversity in the Kingdom. For more information, go to ww.waed.net.
The International Council on Clean Transportation (ICCT) has commended the Kingdom of Saudi Arabia on its success in issuing the Saudi Corporate Average Fuel Economy Standard (Saudi CAFE) for light-duty vehicles.
The ICCT indicated that this standard is a pioneering model of government achievement considering that it has been developed in an accelerated and efficient manner compared to similar standards that the ICCT has witnessed globally.
“This is a landmark achievement,” said Drew Kodjak, executive director of the ICCT, who noted that this is the first standard of its kind in the Middle East. “It is an excellent example of international alignment.”
The Saudi energy efficiency program has been committed to a comprehensive, thorough and flexible standard, which can be used as a reference by other national governments and opens the door to wider adoption of similar standards across the Gulf Cooperation Council (GCC).
Also, it shows a purposeful commitment to setting long-term standards and is uniquely innovative in incorporating used imported vehicles – as well as new – something no other country has managed to accomplish.
“The regulatory team clearly did their homework,” said ICCT program director Anup Bandivadekar, who participated in the May 2014 Saudi Energy Efficiency Forum. He also indicated that the standard was developed in a short period of time — less than two years through a small team of experts compared to similar standards observed in other markets, which typically have required five to 10 years of development.
The ICCT team expressed its delight to have cooperated with the technical team addressing the transportation sector in the Saudi Energy Efficiency Program and shared its admiration to the level of ambition, professionalism, comprehensive analysis and thorough outreach in responding to automakers.
Earlier, the Saudi Standards, Meteorology and Quality Organization (SASO) signed memorandums of understanding on Nov. 16 with 78 automakers representing more than 99.95 percent of the light-duty vehicle sales in the Saudi market.
The transportation sector accounts for about 23 percent of the total energy consumption in the Kingdom. The recently-announced standard for light-duty vehicles targets improving the fuel economy in the Kingdom on average by 4 percent annually. This would elevate the Kingdom’s fuel economy for light-duty vehicles from its current level of 12 km per liter to more than 19 km per liter by 2025.
To ensure the effective enforcement of the standard, a working group of four government agencies has been formed to monitor implementation of the standard and the global automotive manufacturers’ commitment to it, while also tracking the improvement of the fuel economy in the Kingdom.
The working group is comprised of: the Ministry of Commerce and Industry; SASO; Saudi Customs; and the Saudi Energy Efficiency Center.
Saudi Aramco’s Materials Supply has signed a corporate procurement agreement (CPA) with Honeywell International for process automation systems and instrumentation, equipment and services.
The CPA is part of Saudi Aramco’s efforts to identify long-term strategic partners with whom we can work together over the long term, developing fit-for-purpose specialized equipment and services that meet Saudi Aramco’s plans.
By signing this agreement, Saudi Aramco and Honeywell move beyond a transactional relationship to one in which both partners can work together to develop new technologies in the Kingdom, manufacturing industries and service providers. All of this streams into the diversification of the Kingdom’s economy and the creation of jobs for Saudi citizens.
Nabeel Al-Mansour, executive director of Materials Supply, said that the CPA will help Saudi Aramco achieve key components of the Accelerated Transformation Program.
“We have high expectations at the corporate level of companies such as Honeywell to do more locally, both in services, employment and materials,” said Nabeel Al-Mansour, executive director of Materials Supply, in his opening remarks. “This agreement hopefully will be a platform to enhance that effort. So, while we are celebrating this agreement, we are also looking forward to results and hope that in a few years to come it will prove the value of that agreement.”
“Our strategic objective is to partner with strategic suppliers and partner with those technology leaders who add strategic value to the company and the country,” Abdullah Al-Warthan, manager of Projects and Strategic Purchases Department, said. “I am happy to tell you that Honeywell is one of those strategic partners we look forward to working with in the future.”
Vimal Kapur, president of Honeywell Process Solutions, said his company takes the responsibility of CPA seriously.
“We know you have very few partners with whom you are identifying, and you are obviously doing that with a purpose,” Kapur said. The CPA is “not just a structure to make things simpler, but creating a platform where we can think more long-term. Your long-term requirements are well understood, to create more material manufacturing here, more training of local people and creating more skills.”
Norm Gilsdorf, president of Honeywell High Growth Regions, commented: “The CPA is a benchmark to take us to the next level. We are very much committed to localization of resources and content, bringing manufacturing, developing factories here. We are going to bring more technology here and we are going to develop more talent.”
Historically, the relationship between Saudi Aramco and Honeywell goes back to the early days of Saudi Aramco’s founding. In 1948, Saudi Aramco purchased its first Honeywell product (thermostats), and in the early 1980s, Honeywell installed its first distributed control systems at Saudi Aramco facility in Safaniyah, and that system continues to function, along with other equipment and services, such as industrial and commercial automation, process technologies, catalysts, and safety and security systems.
Saudi Aramco’s role in the Kingdom’s chemicals industry is growing and accelerating with a strategic shift in focus designed to increase the local economic footprint of the company’s chemical investments.
Chemicals production capacity in the Kingdom increased by almost 10 percent from 2007 to 2012, allowing the company to capture additional value from its hydrocarbon resources, says Warren Wilder, vice president of Saudi Aramco Chemicals in a recent interview during the annual Gulf Petrochemicals and Chemicals Association (GPCA) forum.
However, it is not enough anymore for petrochemical companies in the GCC states (Gulf Cooperation Coouncil) to maintain a steady output of products that are exported overseas for conversion and manufacturing. These products should form the basis for local conversion industries, said Wilder, which would offer “wide-ranging socioeconomic benefits, including the creation of employment opportunities, and the growth and diversification of national economies.”
Saudi Aramco is actively engaged in integrating its chemicals production with refinery assets, and shifting its focus to conversion industries. Saudi Aramco’s joint venture, Petro Rabigh, has a conversion park associated with it. The Rabigh PlusTech Park was the first industrial estate for conversion industries in the Kingdom that is fully occupied with local conversion and support industries.
To further promote local conversion, Saudi Aramco’s joint venture with Dow Chemical Company, Sadara, is developing a plug-and-play PlasChem Park, which will house downstream chemical manufacturers and plastics conversion industries. Wilder, who sits on Sadara’s Board of Directors, said the chemical plant will begin delivering products in the second half of 2015 that will complement inputs available locally from other downstream facilities in the Kingdom.
Saudi Aramco is also involved in chemicals manufacturing outside the GCC. “China is a large and growing market for chemicals and Aramco Asia already has a footprint in that country,” said Wilder. “For almost two years now Aramco Asia has been successfully marketing polymer products from the Fujian Refinery and Petrochemical Company (FREP).” The company is also in the process of seeking regulatory and other approvals for increasing its stake in S-Oil, a Korean integrated refinery and petrochemical complex, to 63.7 percent to enhance its presence in the growing Asian markets.
Saudi Aramco continues to look for opportunities in growing markets. Many of these opportunities will involve the integration of petrochemicals with the company’s growing international refinery portfolio.
“Our vision is to build an integrated downstream portfolio encompassing the entire value chain from crude supply, refining, petrochemicals and lubes to closely linked marketing and distribution channels, supported by world-class innovation and technologies,” concluded Wilder.