Saudi Arabia’s energy park mega-project

Saudi Arabia

Saif Al Qahtani, president and CEO of King Salman Energy Park (SPARK), talks to The Energy Year about the integrated industrial ecosystem and its main objectives, the latest project developments and the segments of the energy value chain SPARK aims to attract. SPARK is an integrated industrial ecosystem.

What is the main objective behind the creation of SPARK?
SPARK is an industrial ecosystem with sustainability at its core, connecting the world to opportunities in the Saudi energy sector and beyond. It spans an area of 50 square kilometres and is being developed to become the leading gateway to the regional energy sector.
It provides a complete spectrum of integrated services to support business growth in the kingdom and offers infrastructure at international standards for global investors in the oil and gas, refining, petrochemical, power and water production and treatment industries.
The development of the city is planned over three phases. SPARK has completed the majority of its first phase, which consists of infrastructure, roads, utilities and real estate assets established across 14 square kilometres. This area is in addition to a dedicated 3-square-kilometre dry port and logistics zone.
SPARK is one of the main enablers of Saudi Arabia’s Vision 2030, which has a target of localising 70% of the energy sector’s value chain. The project aims to contribute USD 150 billion to the Saudi GDP by 2050 and create 100,000 jobs.

Please give us an update on the latest developments of upcoming projects at the park.
As of Q1 2023, we already have more than 40 approved companies in SPARK. There are projects in different stages of construction. Some of them have already been built and started commissioning and production, several projects are under construction, while others are in the design stage. Within the land available for phase one, 80% has been leased and allocated, with investments worth approximately USD 3 billion.
It is worth mentioning the key infrastructure of phase one that has been completed. This infrastructure includes SPARK’s administration building, Musalla Mosque, a fire station, a health clinic and an auditorium.
SPARK is also home to SPARK Utilities, the third company in the kingdom to be awarded a licence from the Water and Electricity Regulatory Authority to distribute and sell power. In line with SPARK Utilities’ commitment to providing investors with world-class utility services, tenants will also enjoy convenient and reliable access to power, water and gas, enabling operations without any interruption and an all-inclusive, full-service environment.
As another part of SPARK’s ecosystem, we have established SPARK Logistics to manage and operate SPARK’s dry port and bonded logistics zone. The concession was awarded to a newly established joint venture, Energy City Logistics Company, which is a JV between SPARK and Colour Path Holdings Limited, a Hutchison Ports company.
The new facility will provide services for handling containers, breakbulk and project cargo, storage yards, warehousing, customs clearance, and bonded and non-bonded logistics solutions tailored to the needs of SPARK’s energy ecosystem. The dry port will accelerate the Eastern Province’s development as a regional logistics powerhouse with the integration of the future GCC railway, GCC highway and multiple expressways connected to the SPARK site.

What segments of the energy value chain does SPARK aim to attract?
SPARK aims to localise the full value chain of energy sectors, encompassing manufacturers and service providers. It will focus on mature energy sectors, such as oil and gas, chemicals, and power, as well as emerging sectors, such as renewable energy, non-metallics, CC(U)S and hydrogen. Keep in mind that Saudi Arabia represents more than 50% of the energy-related equipment demand in the GCC region.

How does SPARK’s design aim to facilitate the integration of different supply chains?
SPARK is a community where companies can build, operate and prosper and where employees and workers can work and train. SPARK is master planned to seamlessly intertwine industrial areas (such as factories, workshops, yards and the logistics zone) with vibrant residential, educational and commercial areas.
As the park is designed to spur investment opportunities, we locate each sector together to better provide them with a tailor-made ecosystem that supports their needs. We have created a non-metallic hub within SPARK, which is a dedicated area where all non-metallic industries are located that supports the integration of their supply chains.
We also have a digital hub where digital service providers, component manufacturers and data centres are located. SPARK’s digital hub will include a state-of-the-art digital centre, which will mainly act as an incubator and innovation hub for SMEs and startups. The centre is being developed in partnership with Aramco and several other entities.

How will the park leverage its geographical location?
SPARK is located in Saudi Arabia’s Eastern Province, a region renowned for its oil and gas resources and for its high demand for energy goods and services. SPARK is at the epicentre of the global energy market. With a strategic base at SPARK, energy sector players will enjoy unparalleled access to growth opportunities, supply chain efficiencies and world-class support services.
SPARK is easily accessible from King Fahd International Airport, King Abdul-Aziz Seaport and the GCC highway and will also be connected to neighbouring countries via the future GCC railway. Once complete, SPARK will be able to handle 10 million metric tonnes of cargo.
Tenants and investors will be ideally positioned in one of the world’s largest economies to access energy players locally, in the wider Gulf region and across the world.

Why is SPARK’s LEED sustainability certification important for investors?
SPARK was the first industrial city to receive the Silver LEED certification, which is a positive aspect for energy investors looking for a low-emissions industrial park. SPARK is going to have its own solar farm to generate clean energy to distribute to tenants, which will enable them to produce greener products. The target is to generate 100 MW of solar power by 2025, which would represent 50% of SPARK’s energy mix.
SPARK’s administration building showcases the utilisation of innovative technologies and sustainable practices. The building was constructed using ConXtech structural steel technology, which reduces construction times by 60%. This method allowed for the installation of 400 tonnes of structural steel in just two weeks as opposed to the conventional six weeks.
Additionally, sustainable materials were employed, such as green concrete, which consists of 30% recycled road pavement. This substitution maintains strength while reducing water consumption, carbon emissions and waste.
Furthermore, in the Al Qurayyah bridge deck, conventional steel reinforcement was replaced with glass-fibre reinforced polymer (GFRP), resulting in a 74% reduction in structure weight. GFRP rebar is corrosion free and serves as a viable alternative to epoxy-coated steel rebar.
SPARK also prioritises renewable energy and has solar streetlights powered by vertical photovoltaic cells and lithium-ion batteries for energy storage.

What is your role in helping investors obtain the required approvals from the government?
SPARK is an investment opportunity promoter that supports the tenants and guides them through their investment journey within the kingdom to align them with other industrial stakeholders in the industrial ecosystem.
SPARK’s one-stop-shop concept aims to centralise all processes and requirements involved in the investor journey at a single location, simplifying and reducing the lead time involved in getting the support and approvals needed to set up businesses in Saudi Arabia and at SPARK. This includes support in areas such as licensing and permit procedures, licence renewals, financial support and recruitment.

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