Growth in the midstream sector

Kuwait

Ahmad F. Al Hajri, founder and managing director of Al Hajri Gulf, talks to The Energy Year about the company’s role in Kuwait’s energy sector and the other domains it is investing in. Al Hajri Gulf is a diversified establishment covering various sectors and delivering total solutions to clients.

What’s Al Hajri Gulf’s role in Kuwait’s energy sector?
Al Hajri Gulf was established in 2005, and ever since, we have been investing in several frontiers with a focus on two major areas: the industrial sector, that is, energy, water and power, and the analytical, scientific and education (ASE) sector. Al Hajri Gulf started its journey as a general trade house, and as the company matured and developed expertise, we identified our areas of strength based on the competitive advantages acquired over our competitors.
In the industrial sector, our supply domain is built around pipes. That means we supply everything linked to pipes, from fasteners and stud bolts all the way to the actuator, which is the central part of the control valve.
In industrial services, we are solid in Kuwait’s industrial-related marine services, having an experienced diving team offering subsea maintenance and construction works. We cater to, for example, refineries – we played a role in the Al Zour Refinery – and the jetties of the Kuwait Ports Authority. In addition to these services, we also supply a range of specialised products to the industry.
Concerning ASE, Al Hajri Gulf is an active player in Kuwait when it comes to the supply of scientific and testing laboratory equipment. We focus on refineries, research, environmental and general testing laboratories. We position ourselves as a one-stop shop that delivers turnkey projects, from supplying consumables such as reagents, chemicals and glassware to the major equipment, furniture and software solutions for laboratories.
In addition to our core focus areas, Al Hajri Gulf’s business development team actively promotes Kuwait’s thriving business opportunities throughout the regional and international arena and facilitates the presence of international companies in the country by providing them with support services. For example, we can support international companies interested in bidding for a specific project or assist them in establishing a long-term presence in the country.

What is your client outreach in the industrial sector?
Generally, we either work as a main supply contractor directly to the client or as a subcontractor to the main contractors. Our specialised team engages with the clients from the budgetary stage all the way to delivering the material as per requirement and within the time frame. Our main clients in Kuwait are the K companies, their contractors, and the Ministry of Electricity & Water & Renewable Energy for power and water plant requirements. We also operate in Qatar, where our primary client is QatarEnergy. Besides that, we work with Qatar Gas and TotalEnergies. We plan to enhance our operations there in 2023 and expand further into the region. One of our target clients is Saudi Aramco in Saudi Arabia, where some of our existing partners already appreciate our capabilities and are, therefore, keen to team up with us.

What is your operational strategy in the laboratory business?
We are a renowned supplier in the ASE sector in Kuwait. This sector has witnessed steady growth over the last two decades, and we foresee a 15% expansion per year for the next five years. The demand for lab equipment, especially environmental, is growing steadily in Kuwait, sustained by all of the environment-related initiatives, clean energy and industrial pollution control requirements.
Our strategic growth in this business is horizontal, meaning we continually promote our company to potential clients who may benefit from our products and services. Today, ASE contributes to 15-20% of Al Hajri Gulf’s business annually.
Our primary competitive advantage in this business line is the after-sales support we offer. We have a service team double the size of the sales team. This differentiates us from many other companies in the market that supply equipment without offering the proper after-sale support. Thanks to this, we have gained the confidence of clients.

Which industrial marine services contracts are you currently targeting in Kuwait?
We worked on the artificial island for Al Zour, providing part of the subsea work. We now target upcoming projects in Kuwait, including the upgrade of KNPC’s Marina, the renovation of the Kuwait Ports Authority’s ports and the Halliburton project. We certainly want to play a role in the new offshore drilling campaign. Offshore drilling is considered a new era in Kuwait’s oil and gas sector, and as such, it will require different types of technology, experience and service. A limited number of international companies are already present in Kuwait are capable of such services, but more companies are getting ready, and so are we.

How do you select your targeted principals?
They are either vendors of products we target associating with or providers of services we need. For instance, when we recognise an opportunity within our reach and domain, we draw on our extensive international network and identify the right partner to work with, either as their agent or by establishing a joint venture. We operate based on active market intelligence to identify potential partners, monitor market trends and seize unfolding opportunities.
Regarding our trade division, the need for continuous preventive maintenance and upgrades makes the demand for our offerings vital. Moreover, Kuwait is an important and large consumer of pipes, which flow across the entire country. In this regard, we focus on providing our clients with the best-quality commodity and sophisticated products that undergo extensive quality assurance processes, procedures and inspections. Our experienced engineering team thus actively works with our international partners to continuously improve our products. Our relationship with our partners is always a long-term, strategic alliance.

What are your key goals for 2023?
2022 was a year of quality for us. We focused mainly on improving and achieving the level of quality we want to be at. To this end, we introduced IT solutions that enabled the various organisational divisions to be entirely integrated and inter-connected through an app. The creation of this platform has translated into the enhancement of our reporting, control, evaluation, precision and quality.
Concerning the year ahead, we are excited but cautious at the same time. Due to the current global unrest, finances are likely to become more expensive, which will affect us, as will the ongoing unstable supply chain. Although it is challenging, this also comes with opportunity, as many projects on hold will soon be reactivated. For instance, we expect an expedition of KIPIC’s Al Zour Petrochemicals complex. The estimated investment, expected to materialise next year or soon, is USD 10 billion, and commercial operations are scheduled to begin in 2026. With an annual petrochemical capacity of 6.72 tpy, the complex will integrate the Al Zour Refinery. It is expected to produce high in-demand products such as ethylene, propylene and others.
Moreover, with Kuwait expediting its goal to reach 4 million bpd, we expect significant growth in the requirements for midstream facilities such as gathering centres and flowlines. They are all projects where we play a big part as a supplier. In 2023, Al Hajri Gulf is targeting contract agreements with our clients. The offshore drilling campaign will drive the demand for marine services and materials, and we want to be a part of this.
Another crucial target for 2023 we have in the industrial sector is to offer integrated solutions, aiming to provide an added value to our offering by supporting our clients with maintenance and after-sale support through establishing a specialised fabrication and service centre. For example, valves often require refurbishment, calibration or testing, which are services that we want to develop.

Read our latest insights on:

• Kuwait
• Qatar
• Saudi Arabia