US-based offshore specialist McDermott has signed a memorandum of understanding with Saudi Aramco to build a new fabrication and marine complex on Saudi Arabias Gulf coast.
McDermott, which has won a string of contracts in Saudi Arabias offshore oil and gas sector over the past two years, already has a permanent presence in the kingdom, with fabrication facilities in Dammam and a recently opened office in Al-Khobar.
The MoU covers the long-term lease of a facility at the planned $5bn maritime yard in Ras al-Khair, located 60 kilometres north of Jubail.
The agreement comes amid a push by Aramco to double the amount of locally produced energy-related goods and services procured with the kingdom to 70 per cent by 2021.
By shifting the focus of the energy sector to local industries, Aramco aims to create hundreds of thousands of high-skilled jobs and long-term careers for Saudi citizens, Abdulaziz al-Abdulkarim, vice-president for procurement and supply chain management, said in September.
Aramco also targets the Saudi energy goods and services industry to export 30 per cent of output over the same time frame.
Contractors working in Saudi Arabia are subject to the governments In-Kingdom Total Value-Add (IKTVA) Programme, which requires a minimum amount of goods and services for each scheme to be procured domestically.
Abdulkarim told reporters in Bahrain this week that Aramco is targeting an investment of SR16.5bn ($4.4bn) to develop a new industrial city close to Abqaiq to develop energy-related industries and create thousands of jobs.
These projects form part of Saudi Arabias Vision 2030 strategy to boost the contribution of the private sector and diversify the economy from its reliance on oil.