Jizan Economic City to go ahead

18 April 2013

Now that Aramco is in charge, it can ensure the city is a success by building a power plant, along with a world-class deepwater port

Saudi Aramco’s commitment to Jizan Economic City (JEC) has never been in doubt since it assumed control of the $7bn refinery project that was meant to be the kingdom’s first independent downstream scheme.

There are several reasons why JEC has not yet enjoyed the success Riyadh hoped for, but the indications are that this is going to change. Aramco is now JEC’s anchor tenant and the refinery and power plant the firm is constructing should act as the catalyst the city needs. 

In the past, a scenario played out that can be all too familiar for any industrial city anywhere in the world. The local Saudi Binladin Group (SBG) and Malaysia’s MMC Corporation were the initial partners in the development of JEC in a landmark deal mooted to be worth $27bn.

The initial plan was for JEC to attract heavy industry, a massive food production cluster, as well as an independent oil refinery. However, when the vast majority of these schemes were either delayed or cancelled, SBG and MMC were obviously reluctant to commit to the large-scale development of the city. Their partnership has now been dissolved after the Saudi Arabian General Investment Authority (Sagia) dropped the firms from the JEC project. When MEED reported last year that this was likely to happen, most observers said it would only be a matter of time before Aramco took over the majority of JEC’s development.

What is clear is that to make the city a success, the power plant needs to be built, along with a world-class port with a deep-water channel large enough to handle large vessels. Jizan is in the remote southwest of Saudi Arabia, making road haulage unfeasible. 

Jizan is an impoverished area and desperately needs JEC. Riyadh understands the importance of JEC in creating jobs for a city close to the Yemen border. Aramco is laying the foundations and it just needs more firms to commit to the city. 

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