Category Archive: Saudi Aramco News
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.
Saudi Aramco is committed to doing business differently, encouraging the company’s strategic partners to purchase locally manufactured goods and services, and encouraging the creation of local jobs for Saudi citizens.
Last week, Saudi Aramco signed a corporate procurement agreement (CPA) with Mitsubishi Hitachi Power Systems Limited, committing them as partners in developing new technologies in the Kingdom, fostering manufacturing industries and service providers, and creating jobs for Saudi citizens.
Signaling the importance of the event, Saudi Aramco’s Upstream senior vice president Amin H. Nasser, Gas Operations vice president Ahmed Al-Sa’adi, and Materials Supply executive director Nabeel A. Al-Mansour attended the event, while Mitsubishi Hitachi Power Systems senior vice president Ken Kawai and a team of senior management from its Tokyo, Dubai and al-Khobar offices represented Mitsubishi Hitachi.
Saudi Aramco has relied on Mitsubishi Hitachi for years as a supplier of power systems, Al-Mansour said, but the CPA “is just one tool to enhance our strategic relationship.”
“I think it is good that we have the agreement signed and sealed, and what we would like to see now is action on the ground, in localization of facilities and services,” he said.
Abdullah Al-Warthan, manager of the Projects and Strategic Procurement Department, said the CPA “is really moving our two companies forward from the tactical and transactional to a more strategic partnership. You have the technology, the know-how and the quality, and we need you to be part of the business for many years to come.”
“Thanks to Saudi Aramco’s continuous support and understanding, we concluded the CPA, which will open a new stage of our relationship,” said Kawai at the event.. “In concluding this agreement we have already established a local entity in al-Khobar.”
Kawai said the new entity, called MHPS-Saudi, will be able to provide comprehensive services to Saudi Aramco, including component repair, “and the education for young Saudi engineers and Saudization through technical training.”
Mitsubishi Hitachi “would like to show you our commitment to the further economic development to the Kingdom of Saudi Arabia, through our local entity. We believe MHPS-Saudi will add great value, excellent quality to Saudi Aramco. We will do our best to contribute to Saudi Aramco.”
The Saudi Arabia Advanced Research Alliance (SAARA) was launched today in Saudi Arabia to drive the commercialization and application of innovative research and development activities in the Kingdom.
To mark the establishment of SAARA, a signing ceremony took place today in Dhahran under the patronage of HE Ali I. Al-Naimi, Minister of Petroleum and Mineral Resources, Kingdom of Saudi Arabia.Mr. Al-Naimi said: “The establishment of the SAARA alliance is a very welcome initiative and will help stimulate continued economic growth in the Kingdom.”
The Saudi Arabia Advanced Research Alliance (SAARA) is a new partner-based collaboration between six organizations that span Saudi Arabia’s public and private sectors. SAARA will provide a focal point within Saudi Arabia to bring industry and academia together to find ways to translate technology and intellectual property into commercially available products and applications. The SAARA partners are:
Saudi Aramco – the leading global integrated energy andchemicals company;
King Abdulaziz City for Science and Technology (KACST) – Saudi Arabia’s premier national science agency and its national R&D labs;
King Fahd University of Petroleum and Minerals (KFUPM) – an institution known for its competitive graduates, leadership in science and engineering programs, and accumulated innovation push;
King Abdullah University of Science and Technology (KAUST) – a world-class, graduate-level science and technology university, inspiring a new age of scientific achievement;
TAQNIA – the technology arm of the Saudi Public Investments Fund, and a knowledge-based industries accelerator; and
RTI International – one of the world’s leading research institutes dedicated to improving the human condition by turning knowledge into practice.
As its first action, SAARA has established Technovia – a new venture dedicated to maintaining a systematic, staged process to build a pipeline of commercialization opportunities in Saudi Arabia. Located at the Dhahran Techno Valley, and with offices in Riyadh and Thuwal, Technovia will be operated by TAQNIA and RTI. Technovia will work with stakeholders to prepare technologies for the strongest market entry and position them competitively for external investment and funding. It will screen ideas for those with highest commercial potential, conduct intellectual property assessment, market research and competitive analysis, develop and test prototypes and field-able demonstrations, and prepare technologies for commercial launch.
HE Dr. Mohammed Al Suwaiyel, President, King Abdulaziz City for Science and Technology said: “As a sign of our focus and intent, the SAARA partners’ first action is to create Technovia – a new venture that will bridge the gap between research and industry by streamlining the processes required to rapidly transform great ideas into high-impact commercial solutions that can be readily adopted by industry.”
Khalid A. Al-Falih,President and CEO,Saudi Aramcosaid: “Saudi Aramco is proud of its contribution to developing the Kingdom’s world-class research and innovation infrastructure and we are committed to continuing to raise the bar even higher. SAARA and Technovia’s focus on the rapid commercialization of innovative technologies will have a multiplier-effect, stimulating innovation, driving growth in new industrial sectors and helping to further diversify the Kingdom’s economy.”
HH Dr. Turki bin Saud Al-Saud, VP for Research Institutes, King Abdulaziz City for Science and Technology and Chairman, TAQNIA said: “A critical need for the success of the national science, technology and innovation plan is to bridge the gap between R&D and industry. We expect SAARA and Technovia to bridge part of this gap by its affiliation with an industrial leader like Saudi Aramco and leading R&D organizations like KFUPM, KAUST, and KACST.”
Outlining the need to streamline intellectual property commercialization processes in the Kingdom, HE Dr. Khaled Al-Sultan, Rector, King Fahd University of Petroleum and Minerals said: “Saudi Arabia’s improved R&D infrastructure requires a stronger technology commercialization pipeline. This alliance will strengthen the national innovation ecosystem and help drive a diversified economy for the Kingdom.”
Dr. Jean-Lou Chameau, President, King Abdullah University of Science and Technology said: “Technovia will help accelerate KAUST’s economic and technology development impact on Saudi Arabia’s key national strategic priorities. This collaboration will become a platform for all research universities in the Kingdom and offer Saudi-based and global companies opportunities to impact the knowledge economy within the nation.”