Saudi Arabia’s King Salman unveils $35.6 billion project for industrial city

Aramco will be investing $4.1bn to supply competitively priced energy required to develop the project

Saudi Arabia's King Salman bin Abdulaziz unveiled Wa’ad Al Shamal - a new integrated industrial city in the Northern Borders Province. Bandar Algaloud/Courtesy of Saudi Royal Court

Boosting the country’s mining infrastructure, Saudi Arabia has unveiled a SAR 86 billion ($35.6bn) project, Wa’ad Al Shamal, a new integrated industrial city near Turaif in the Northern Borders Province.

Saudi Aramco, the world’s biggest oil-producing company, will be investing SAR 10bn ($4.1bn) to supply competitively priced energy required to develop a project that was unveiled by Saudi Arabia's King Salman bin Abdulaziz on Thursday.

Also known as ‘Northern Promise’, the development is expected to become a major mining hub in the region while furthering economy and creating thousands of jobs.

“The Northern Promise can be a prime catalyst in creating transformational industries that can generate more growth and more value from niche manufacturing sectors such as manufacturing glass, glass fibres, plastics and solar panels,” said Saudi Aramco’s president and chief executive Amin Nasser.

It is estimated that Wa’ad Al Shamal will generate SAR 24bn ($9.9bn) from non-oil sectors and contribute nearly 3 per cent to the Kingdom’s gross domestic product. About 30,000 jobs are expected to be created for Saudi youth, especially those from the region. The 440 square kilometres development is already hosting phosphate processing facilities.

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“What we see now at Wa’ad Al Shamal city is the productive outcome of close collaboration between government sectors, agencies and leading national companies,” added Mr Nasser.

Supplying competitive gas feedstock to Wa’ad Al Shamal - around 1,000 kilometres from Saudi Arabia’s capital city Riyadh - was initially deemed as complex and costly due to its terrain and geography. However, Saudi Aramco came up with efficient solutions to explore and drill gas resources in the region, specifically unconventional gas.

Unconventional gas is natural gas extracted from sources of production that are, in a given location, considered to be new and different. Its production will replace the burning of hydrocarbons for electricity generation.

Saudi Aramco had commenced commercial production of unconventional gas in the North Arabia Field in May 2018, supplying approximately 55 million standard cubic feet of gas per day (MMscfd) to a local power plant. The gas production will ramp up to 190 MMscfd towards the end of 2018 to meet customers’ needs.

According to the official Saudi Press Agency (SPA), construction of Waad Al-Shamaal industrial city started in 2014. A 290 square kilometres area has been allocated to Waad Al-Shamaal city, in addition to an adjacent land of 150 square kilometres for Riyadh-headquartered Maaden Company to develop a phosphate industry, which is the core project of the city.

After the finishing of the second phase of the project in the coming months, the Kingdom's production of phosphate fertilisers will increase to 9 million tonnes annually, making it the second largest producer in the world, SPA said.