Aramco empowers local capabilities with $6.93bn purchase agreements for pressure vessels
The purchase agreements, signed on 1 May 2018, will focus on the supply of pressure vessels by local manufacturers, mandated under IKTVA goals as well as to actively pursue Saudisation targets.
Saudi Aramco has further expanded its in-kingdom total value add (IKTVA) programme and strengthened its relationship with local industry players by awarding purchase agreements to 16 Saudi pressure vessel manufacturers.
The agreements, carrying a procurement value of more than $6.93bn, further enhances the company’s ongoing support and commitment to empower local companies within the small and medium-sized enterprises (SMEs) realm under IKTVA, in tandem with Saudi Vision 2030.
The purchase agreements, signed on 1 May 2018, will focus on the supply of pressure vessels by local manufacturers, mandated under IKTVA goals as well as to actively pursue Saudisation targets. The 16 companies are expected to build up their capabilities and competitiveness throughout the agreement duration of 10 years.
The 16 companies are: Al-Zamil Process Equipment, Al-Zamil Heavy Industries, Arabian CBI, Hesham Al-Sewedy, Geyad Factory, Olayan Descon Engineering, Saudi Arabian Fabricated Metals, Gulf Steel Works, Bemco Steel Industries, NATCO Al-Rushaid Middle East, Al-Zamil Metal Works, TItanium & Steel Manufacturing Company (TSM Arabia), Petron Saudi Industrial Co., Inma Steel, Oil and Gas eq. and Gulf Sky Factory Company.
Abdulaziz A Al Abdulkarim, Saudi Aramco vice president of procurement and supply chain management, commended the manufacturers for developing robust IKTVA action plans that will increase the number of Saudi jobs and avail more business in pressure vessels components to local SMEs.
Al Abdulkarim set the expectations with the manufacturers to work closely with Saudi Aramco to increase the percentage of Saudisation under these agreements at all levels and disciplines, including engineers, welders and other professional skilled workers.
“These agreements, set for 10 years, will expand the local industry’s capability and provide high-quality supply of materials and services to Saudi Aramco. IKTVA is a cornerstone of Saudi Aramco’s procurement process which will expedite localisation, promote locally based SMEs and help economic diversification in support of Saudi Vision 2030. SMEs are the engine of innovation for economic growth and development. They have the agility, the know-how, the market expertise, and the products the oil and gas industry requires. That is why Saudi Aramco recognises the huge potential of SMEs, and we believe the companies chosen under this agreement will step up to the challenge and meet the required expectations,” Al Abdulkarim said.
Pressure vessels represent an integral and critical equipment group for oil and gas processing facilities that require sophisticated manufacturing capabilities and labour skills.
Saudi Aramco is also extending the IKTVA requirements to the procurement of other strategic materials such as drilling equipment, process automation systems, line pipes, pumps and valves.