Fostering a culture of technology-based entrepreneurship in the Kingdom to meet the increasing need for potable water.
This year Aramco Entrepreneurship Center (AEC) and GE’s innovation center “Ecomagination” launched a global competition in the area of seawater desalination, with a particular focus on using renewable energy. It has already attracted a wide variety of proposals, applying multidisciplinary fields from 32 countries with 108 proposals and more than 15,000 site visits.
The initiative received significant support from HE Abdulrahman Al-Ibrahim, the Governor of the state-owned Saline Water Conversion Corporation (SWCC), as well as from Saudi Aramco’s Power Systems organization.
Saudi Arabia has few natural water resources, and it depends upon an extensive infrastructure of costly and energy-intensive water desalination plants and rapidly depleting ground water reserves to meet its fast-growing water needs. The country is the world’s largest producer of desalinated water, pumping more than 1 billion cubic meters a year via nearly 2,000 miles of pipelines. Over 50 cities and distribution centers in Saudi Arabia receive their water from these plants.
Current desalination techniques are very energy intensive. Saudi Arabia is burning the equivalent of 1.5 million barrels per day of fuel to power its desalination processes. An increase in energy efficiency or a reduction in consumption is the key to ensuring that the country receives the most value for its natural resources.
The global competition addresses this critical area and potentially presents alternatives from key experts around the world to expand the technology options to consider for SWCC and other Kingdom-based organizations to develop, leverage and deploy in the future, empowering regional entrepreneurship.
The Sinochem Quanzhou Refinery in South China’s Fujian province recently received its first shipment of Saudi Aramco crude oil.
The crude shipment of Arabian Medium and Arabian Heavy is the first ever oil the refinery purchased since it officially went into operation in July on the back of a successful trial run early this year.
“The delivery will help us enhance our role as a responsible and reliable energy supplier worldwide as we have been stably powering the world with our energy products,” said Abdallah Al-Subaiyyal, acting president of Aramco Asia. “We are committed to fulfilling our obligations and intend to do so for the future.”
The Very Large Crude Oil Carrier (VLCC) Mt Ingrid carrying the crude oil arrived at Quanzhou Huanggan Port in the South China Fujian province on August 19 after a 22-day voyage. The tanker started unloading the oil upon arrival.
State-backed Sinochem first began doing business with Saudi Aramco back in the 1990s. The newly started refinery, a fully owned Sinochem subsidiary with a capacity of 240,000 barrels per day (bpd), can produce gasoline and diesel that meet Euro V standards.
Sinochem updated its Crude Oil Sales Agreement (COSA) with Saudi Aramco in May to import 540,000 bpd of Arabian Medium and Arabian Heavy crude oil before its Quanzhou refinery began operations in July.
The volume of this specific shipment is about 2 million barrels. This specific VLCC is the first of a new increment of supply to China. Quanzhou refinery added an additional 54,000 bpd to Sinochem’s existing COSA with Saudi Aramco taking it from 45,000 to 99,000 barrels per day.
The world’s largest chemicals manufacturing facility built in a single phase, Sadara Chemical Co., is in the home stretch toward the production of its first products in 2015. Reaching the finish line on time is crucial to the project’s overall success, and it will require the commitment of manpower and resources from every contracting company currently working on the project.
That was the message conveyed by Saudi Aramco president and CEO Khalid A. Al-Falih and Dow Chemical Co. CEO Andrew N. Liveris at the Sadara CEO Summit held in Jubail on Sept. 16. It was also a celebration of achievements, including news that the Sadara project is 70 percent completed. The next crucial stage is planning for future challenges in the weeks and months ahead.
With more than 40 CEOs gathered from some of the top global engineering and construction companies, Al-Falih, Liveris, and other company officials speaking at the event agreed it was clear the Sadara project was well on the way to delivering on its promise of being a game-changer for the Saudi economy.
Launched in November 2011 and scheduled to become operational in 2015, Sadara will be a big part of Saudi Aramco’s strategy to diversify the Kingdom’s economy, creating business opportunities for Saudi entrepreneurs and jobs for thousands of talented Saudis.
In a league of its own
“Sadara is probably the planet’s most complex engineering undertaking — not just now, but at any time,” Al-Falih said. “Whether it’s scale, complexity, advanced technology or economic and commercial impact, it is in a league of its own.”
Al-Falih said that the project has come a long way from last year. Last year at this time, Sadara was at 30 percent completion. This year, it is above 70 percent complete. “The next 30 percent is what people will remember: how we finish, when we finish, and what the result is of the facilities we finish.”
Al-Falih urged contractors to redouble their efforts and work together as a team to ensure that Sadara remains on schedule. “What we do want is to bring Sadara to life in the best, most effective and safest manner possible, and the key to that is teamwork,” Al-Falih said.
“We are right now rounding the corner and entering the home stretch, and while our objective is closer than it was, our steps forward are even more critical, requiring greater determination and a higher level of cooperation among all our partners,” Al-Falih said. “If we can achieve that, we will establish an industrial landmark that will contribute to prosperity for generations to come, and put your companies’ names and our names in the history books.”
Once built, Sadara will have the capacity to produce 3 million tons per year of high quality chemical products such as polyethylene, propylene oxide, elastomers, glycol ethers, amines, isocyanates and polyether polyols, many of which have never previously been produced in the Kingdom. The creation of Sadara will not only create hundreds of jobs for Saudis at the plant itself, but it will also create an environment where Saudi entrepreneurs can establish manufacturing companies using those chemical products to make everything from paints and sealants to insulation and auto parts and even toothpaste.
Even at 70 percent of completion, Sadara is a marvel.
By completion, more than 160,000 tons of steel will have been be used in its construction, enough to build two Golden Gate bridges.
Also by completion,1 million cubic feet of concrete will have been poured, enough to build the equivalent of three King Fahd causeways to Bahrain.
2,500 kilometers of pipe have been laid, enough to stretch from Jubail and Jiddah, twice.
All of this has been done with a keen eye toward Saudi Aramco’s corporate value of Safety. As of Sept. 16, a recorded 228,968,755 man hours had been conducted without a reportable injury.
“The world is watching us,” said Liveris. “Customers around the world are watching; they have already signed letters of intent matching more than 100 percent of planned capacity.”
“Our industry is watching as we construct the most incredible industrial complex of our time,” Liveris said. “They know about Saudi Aramco’s incredible reputation, and they know about Dow’s. They believe that if anyone can pull this off, we can.
“Once in a career, once in a lifetime, you have the opportunity to do something truly special,” Liveris said. “I will always remember that I was involved in this special something — that we, together, built Sadara into a force for human progress.”
Saudi Arabia has unique advantages for entering the chemicals business, said Warren W. Wilder, vice president of Chemicals. And Saudi Aramco and Dow are uniquely capable of bringing a project as large as Sadara up and running.
“There’s nothing that stops Saudi Aramco from being successful,” Wilder said. “We have the hydrocarbon resources; we have the capital; we have the operational know-how. Now, it’s just a matter of getting after it.”
Joseph Brewer, the chief program officer for Sadara Chemical, told the audience, “Last year, we were on the verge, it’s like we saw a very large mountain in front of us, but in the past 12 months, as Khalid said, we have accomplished more than 50 percent of the back-end construction, and we should be proud of that.
“But now is not the time to declare victory,” Brewer added. “It’s the time to focus even more and deliver on our commitments.”
Saudi Aramco has announced the appointment of two people to general management level.
Nabeel I. Al Afaleg, who had been appointed to King Abdullah Petroleum Studies and Research Center (KAPSARC) on an interim basis, has been assigned to the position of chief petroleum engineer, effective October 1. Samer S. AlAshgar has been appointed general manager — on special assignment — effective September 14 and will be on loan to KAPSARC until further notice.
In his previous post, Al Afaleg was the manager of Finance and Operations at KAPSARC, where he oversaw the establishment of operating systems, facilities and the organization.
Before that, he was manager of the Southern Area and Northern Area Reservoir Management departments, respectively, and was responsible for planning and executing best in class hydrocarbon recovery strategies of Saudi Aramco oil fields and nonassociated gas reservoirs.
Al Afaleg joined the company in 1987, taking on tasks within Upstream. He holds a B.Sc. from King Fahd University of Petroleum and Minerals, as well as an MSc and Ph.D. from the University of Southern California, all in petroleum engineering. He also holds an MBA from the Massachusetts Institute of Technology (MIT), where he received a Sloan Fellowship.
Al Afaleg has received the Distinguished Service Award for his contribution to the Society of Petroleum Engineers (SPE).
AlAshgar had previously led the Upstream Research Center in Saudi Aramco, EXPEC Advanced Research Center (EXPEC ARC), which is responsible for research and development of subsurface upstream technologies.
As head of EXPEC ARC, AlAshgar was responsible for driving the technology agenda and growth of the center both locally in Dhahran and globally through the establishment of several global research centers in North America, Europe and Asia. He oversaw six research teams who develop technologies relevant to oil and gas exploration, development and production, in addition to a Technical Services organization responsible for field operations, support and studies.
AlAshgar began his Saudi Aramco career as an engineer in 1993 and has held several management positions. Before joining EXPEC ARC, he was the head of the Oil and Gas Production Planning Division within Saudi Aramco. He joined Saudi Aramco after obtaining his B.S. in chemical engineering from the University of Tulsa. He holds a master’s degree in petroleum engineering from Stanford University and an MBA from MIT.
KAPSARC is an international, independent, nonprofit research institution dedicated to researching energy economics, policy, technology, and the environment across all types of energy.
The mandate of KAPSARC is to advance the understanding of energy challenges and opportunities facing Saudi Arabia and the world today and tomorrow, through unbiased, independent, and high-caliber research for the benefit of society. During its establishment phase, the center has developed more than 20 research projects, conducted numerous international workshops and released several research papers.
The GCC Board Directors Institute (BDI) recently held its 2nd Chairman Summit. Co-sponsored by Saudi Aramco and SABIC, the event attracted over 60 chairmen and senior Board directors from leading organizations across the Gulf.
The Summit’s prime objective is to stimulate dialogue on matters of particular interest to chairmen and their contribution in achieving and enhancing Board effectiveness and corporate governance standards within their respective organizations.
“We are pleased with the continuing success and increasing momentum of the GCC Board Directors Institute. This young not-for-profit organization, which was established in 2007 based on a visionary seed planted by Saudi Aramco aiming to make a positive impact on the GCC economies and societies by raising the level of Board effectiveness, is now in full gear,” said Mr. Abdallah Al-Saadan, Senior Vice President- Finance, Strategy & Development of Saudi Aramco.
Mr. Al-Saadan added: “The various workshops, Board members’ development tools and techniques, world-class faculty who lead focused interactive sessions to address relevant Board issues, and the flagship program “Chairman’s Summit” are making tremendous strides towards achieving the original vision. The attendance of a large number of leading chairmen, Board members, CEOs, CFOs, regulators and consultants is a great testimony to the success of BDI, and a confirmation that it is filling a critical gap in the region. Saudi Aramco continues to believe that the positive impact BDI has been making in promoting and strengthening effective directorship will continue to expand over time. Based on that, our company will continue to lend its full support to BDI for the benefit of our region.”
“Again, Saudi Aramco, and I am sure the other founding members and partners of BDI, are pleased with BDI’s continued success, growing role, positive reputation, and increasing contribution towards sustainable prosperity within the GCC region,” further said Mr. Al-Saadan.
Key discussions were launched among the panelists, 8 prominent business industry leaders from Saudi Arabia, United Arab Emirates and Bahrain, including Ms. Sabah Al Moayyed, CEO of Ebdaa Bank, Mr. Taha Al Kuwaiz, Chairman of Bank Al Jazira, Mr. Mohamed Hamad Al Shehi, Board Member at Emirates NBD, Dr. Hasan Al Zahrani, President and Chief Executive Officer of Luberef, Ms. Afshan Akhtar, General Counsel of ALBA, Mr. Abdullah Al-Suwailem, President & Chief Executive Officer of Petro Rabigh, Mr. Abdulmohsen Alissa, Chairman & Managing Director of Abdullatif Alissa Group Holding Company, and Mr. Beshr Bakheet, Managing Director of Osool & Bakheet Investment Company.
“SABIC is honored to co-sponsor with Saudi Aramco this prestigious event. We are extremely delighted with the outcome of the Summit and its success in raising awareness in regards to the Chairman’s unique role in ensuring Boards achieve and maintain higher levels of corporate governance practices,” said Mr. Mutlaq H. Al-Morished, CFO of SABIC and Chairman of BDI.