Saudi Arabia as a maritime hub

Saudi Arabia

Samir Souiai, area operations manager of American Bureau of Shipping (ABS), talks to The Energy Year about Saudi Arabia’s roadmap for decarbonising the marine industry, the country’s potential for becoming a maritime hub and how ABS collaborates with Saudi Aramco. ABS is a maritime classification society.

What is Saudi Arabia’s roadmap for decarbonising the marine industry?
The International Maritime Organization’s vision for decarbonising the marine industry has targets to cut carbon emissions by 40% by 2030 and 50% by 2050. To reach these goals, the industry will have to apply many layers of innovation, from energy efficiency efforts to alternative fuels.
In Saudi Arabia we see that these innovations will be applied in phases, with hybrid and dual-fuel vessels in the first wave. Some of Aramco’s recently chartered offshore support vessels feature hybrid battery power, and the company is evaluating the conversion of more units.
Alternative fuels are the final goal for decarbonisation. These include hydrogen, ammonia, methanol and LNG. Which fuel achieves the widest adoption will depend on the availability of the alternatives and investment signals provided by Aramco.
Among the solutions for large vessels is LNG, but Saudi Arabia does not as yet have the LNG bunkering and supply infrastructure in place; stakeholders are watching closely to see where Aramco decides to set the course and expand.

What is Saudi Arabia’s potential for becoming a maritime hub?
Saudi Arabia has the potential to become a maritime hub due to its strategic location at the crossroads of three continents and its access to major trade routes. The country also boasts an extensive network of ports, including King Abdulaziz Port in Dammam, Jeddah Islamic Port and Al Jubail Commercial port.
There is strong leadership with a clear strategy to turn Saudi Arabia into a hub for logistics and maritime transport, and ABS is committed to supporting the fulfilment of this vision. The kingdom has the raw materials, location, policy support and infrastructure under development.
Additionally, Saudi Arabia is investing heavily in modernising these ports with new technology that will enable them to handle larger cargo ships more efficiently. This investment combined, with the country’s pro-business policies, positions it well for becoming a regional maritime hub over time.
ABS is contributing to this development process, bringing worldwide experience to the maritime industry. The kingdom certainly has the potential to become a logistics and maritime hub by 2030.

What are your key points of collaboration with Saudi Aramco?
ABS is supporting Aramco and the kingdom’s strategy to become a maritime hub through our partnership, which includes providing class services to the Aramco fleet. Four Aramco vessels have already achieved the ABS sustainability notation, the first time that vessels in Saudi Arabia have received this notation.
We are implementing the latest technologies, such as smart notations, digitalisation tools and cybersecurity services for ports, as well as providing technology-related training. ABS is also taking part in the development and construction of the International Maritime Industries (IMI) shipyard in Dammam, and we will continue our support of the industry’s development in 2023 and years to come.

What role will training play in developing a competitive maritime industry?
Training is one of the key elements in creating a sustainable, competitive industry, especially in light of Saudi Arabia’s requirement for local content and the need to grow local maritime know-how. The maritime industry is not one of Saudi Arabia’s traditional industries, and there is a need to bridge this gap with new skills in digitalisation, alternative fuels and sustainability. ABS offers multiple training opportunities to meet this evolving need.
Saudi Arabia is home to professionals with a maritime background, but they need to develop new skills for projects of a scale such as the IMI shipyard. In light of this need, IMI is collaborating with King Fahd University of Petroleum and Minerals to develop marine engineering and naval architecture careers.
ABS has a heritage in academic partnerships and training provision. We are ideally placed to support the training and vocation skills required. The main challenge now is how to localise marine manufacturing and the marine supply chain, as well as creating the shipyards that will enable Saudi Arabia to build its own offshore equipment and systems.

What are some of the underlying challenges for local rig manufacturing?
As noted, ABS is playing a key role in the development of the skills required, but in the beginning at least, the certification of the first engines built locally will be a challenge due to the complexity of the process. It requires the coordination of personnel training, materials procurement and technology transfer.
However, with the right support, local industry should be able to deliver quality that meets national and international standards. ABS audits the manufacturing process to ensure components, including engines, comply with both international standards and ABS’s rules and regulations.

What are Saudi Arabia’s marine growth prospects compared to other GCC countries?
We see a lot of growth in the GCC countries, but Saudi Arabia has seen the most consistent growth and has the highest potential for further growth in the region. There are mature competitive hubs, such as Dubai, but growth there is expected to be slower in the future.
Aside from the IMI shipyard, the different projects in NEOM – such as the Oxagon floating city and The Red Sea project – will demand significant logistical expertise. We also expect growth in the yachting and recreational maritime industry, which will create demand for shipyards focussed on yacht building.

What market share of the classification industry does ABS have in Saudi Arabia?
For offshore assets and offshore supply vessels, ABS holds around an 80% market share in Saudi Arabia. For merchant vessels, we have an estimated 30% market share. Our strategic plan for growth in Saudi Arabia has seen us open a facility in Khobar, with plans to open one more in Jubail close to the new IMI shipyard.
ABS is prioritising the hiring of local Saudi nationals and providing them with comprehensive training in classification and other marine surveying and engineering knowledge.

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