Value: $40bn+

Client

Saudi Arabian General Investment Authority (Sagia)

Tel: (+966) 11 203 5555

Consultant

Perunding Alam Bina

Tel: (+60) 3 4023 3522

Jizan Economic City (JEC) has experienced a tumultuous gestation since the local Saudi Binladin Group and Malaysia’s MMC Corporation took on its development in a $27bn deal signed in 2006.

However, following the decision by Saudi Aramco to step up its involvement in the management of the city, many projects are now starting to proceed, signalling a clear change of pace for the ambitious scheme, which is located in one of the remotest areas of the kingdom.

MEED reported in the second quarter of 2012 that Aramco had extended its remit to include the construction of the power plant, previously the responsibility of Saudi Electricity Company. The oil giant was also in discussions to take control of the port facilities from Saudi Binladin Group and MMC.

Due to the fluid nature of the project, it is difficult to pin down an exact value for JEC. Taking into account the city itself and the various industrial projects planned or under way, MEED estimates it will exceed $40bn. The anchor tenant is Saudi Aramco’s $7bn Jizan refinery. The project is under execution, with completion expected in 2016-17.

Adjacent to the refinery there will be an integrated gasification combined-cycle power plant. The facility’s capacity was recently upgraded to 4,000MW, which will easily make it the largest gasification power plant project in the world. As of August, the scheme was at the main contract tender phase. A decision on the winning bidders is expected by the end of 2013.

With so much spare power capacity… additional heavy industry will be attracted to the city

What will come next for Jizan is not known as no major announcements have been made. However, with so much spare power capacity, it is almost certain that additional heavy industry will be attracted to the city. The local Solb Steel started production in 2012 at its JEC plant, which has a capacity of 1 million tonnes a year (t/y) of billets and 500,000 t/y of rebar.

Key dates
Nov-06 Plan for Jizan Economic City first announced 
Oct-12 Engineering, procurement and construction contracts awarded for $7bn Jizan oil refinery 
Apr-13 MMC Corporation and Saudi Binladin Group terminated as developers of the city
Source: MEED

Further plans being discussed for steel production at JEC include a 6 million-t/y pelletising plant, as well as a new meltshop and direct-reduced iron plant.

Other metals projects include the local Cristal Global, which is constructing a titanium dioxide and pig iron plant. The facility will have a capacity of 500,000 t/y of titanium dioxide slag, as well as 235,000 t/y of high-purity pig iron. Start-up is scheduled for 2014.