Saudi Aramco and Baker Hughes explore non-metallics production tie-up

Partners agree to look into joint-venture to manufacture energy industry products made from petrochemicals rather than metals

The Khurais oil field, 160 km from Riyadh. Saudi Aramco plans to meet at least 70 per cent of its procurement spending from Saudi companies by 2021. EPA

Saudi Aramco and Baker Hughes signed an agreement to explore the possibility of setting up a production joint venture to make components from non-metallics as the oil and gas giant looks to expand manufacturing base in the kingdom and cut costs.

Non-metallic materials do not conduct heat or electricity and are used in the manufacture of products made from petrochemicals rather than steel or other metals.

Manufacturing non-metallic components used in the energy sector will also lead to significant cost-savings for Aramco as well as generate significant value addition for the local economy.

Through their JV, Saudi Aramco and Baker Hughes would initially focus on the manufacture in the kingdom of non-metallic reinforced thermoplastic pipes.

"Saudi Aramco has successfully deployed more than 5,000 kilometres of non-metallic pipes, resulting in a significant increase in efficiency and reduction in maintenance and replacement costs across the company’s operations,” said Ahmad Al Sa’adi, Saudi Aramco’s senior vice president for technical services.

"Producing these materials in the kingdom would also unlock opportunities for local manufacturers and facilitate knowledge transfer,” he added.

State-run Aramco, the world’s largest oil exporter, is diversifying into several areas besides oil and gas production to help boost income as well as localise production in Saudi Arabia. It has previously expressed ambitions to become a market leader in the non-metallic materials sector.

Manufacturing components used in the energy sector will lead to significant cost-savings for Aramco as well as generate significant local value addition.

Aramco is also following its "In-Kingdom Total Value Add" initiative, or IKTVA, to increase local content and aims to meet at least 70 per cent of its procurement spending from Saudi companies by 2021.

Separately, the company also opened a research facility in partnership with  Baker Hughes at Dhahran Techno Valley.

The facility will be home to Saudi Arabia's first 3D printer for metal as well as a data visualisation and automation platform to help optimise well activity and construction.

“This centre will be a game-changer in ways that many of us would have considered science fiction at the beginning of our careers,” said Nasir Al Naimi, Saudi Aramco's vice president of petroleum engineering and development.

A visualisation lab equipped with a digital learning, visualisation and automation platform that works with data from muliple sources, will also be part of the facility.