Energy Services and Equipment in the Kingdom

Energy Services and Equipment in the Kingdom of Saudi Arabia are part of the energy sector operating system in the Kingdom. Its mission is to provide the necessary equipment for energy production and various logistic services.

The Kingdom, as one of the largest global energy sources, has prepared numerous manufacturing facilities capable of meeting its energy production needs, encompassing both traditional and renewable sources. The renewable energy sector is a pivotal focus of Saudi Vision 2030, as it signifies a significant regional market in the Gulf region, the Arab world, and North Africa. Furthermore, owing to its strategic geographic location, it serves as a hub for the development and manufacturing of various energy products and equipment.

The Kingdom has a four-decade-long experience in renewable energy, through the King Abdulaziz City for Science and Technology (KACST) research station in al-Uyaynah. Inaugurated by the Custodian of the Two Holy Mosques King Salman Bin Abdulaziz Al Saud in 1980 when he was the Governor of Riyadh Province, it stands as one of the Kingdom's earliest scientific and productive stations. Known as the Solar Village Project, it was established through a Saudi-American partnership aimed at generating 350 kW of power using concentrated photovoltaic arrays.

At the end of 2019, the first Saudi utility-scale Photovoltaic Solar Project was connected to the national electric power grid. The Sakaka Solar Power Plant achieved three hundred MW during its construction. The Sakaka Solar Power Plant project was developed and presented by the Renewable Energy Projects Development Office (REPDO) of the Ministry of Energy. It is the first project launched within the framework of the National Renewable Energy Program (NREP) in the Kingdom.

In addition to renewable energy components, the Kingdom also boasts vast amounts of sand rich in silica, which can be converted into high-purity silicon, the fundamental material in the production of solar cells. Research centers at KACST and the Kingdom’s universities are engaged in localizing and developing various technologies to cover the entire value chain of the solar energy industry, ranging from the advancement of solar cells and panels to the establishment of solar plants.

Through Saudi Vision 2030, numerous investment initiatives have been launched to bolster the pivotal role of energy services and equipment in the country. The Public Investment Fund has initiated a portfolio of projects aimed at investing in promising opportunities across various sectors, notably including oil field services and equipment. This service and equipment market holds strategic and commercial significance due to the abundant oil resources. Globally, the oil field services and equipment sector constitutes a lucrative market for equipment, components, supplies, and services, particularly in the early stages of production for companies focused on oil and gas exploration and production.

The Kingdom has achieved progress in the energy field through institutional work aimed at advancing the oil field services and equipment sector and keeping pace with the manufacture and provision of such equipment locally, through the transfer and localization of technologies. This was with the beginning of the development of 'Taqa' company and the increase of its investments in oil field services and equipment to become a regional leading company in this field.

As part of its efforts to develop the energy sector in the Kingdom, the Public Investment Fund has also launched an initiative to leverage the Kingdom’s natural capabilities for developing and enhancing service facilities and the renewable energy sector. There are expectations of a significant increase in domestic energy consumption in the Kingdom by 2030. Moreover, the initiative aims to bolster the Kingdom’s capacity in solar and wind energy, along with developing value chain industries related to solar and wind energy in the Kingdom. This includes manufacturing equipment such as solar cells, modules, wind turbines, and others.

The manufacturing aspect extended to the establishment of more specialized industrial complexes and facilities to supply the Kingdom's energy system with its equipment needs. One significant development was the establishment of King Salman Energy City, known as 'SPARK'. Located in the heart of energy-related businesses between the cities of Dammam and al-Ahsa in the Eastern Province, SPARK encompasses various industries pertinent to the energy sector. The city caters to both local and regional market demands by focusing on industries and support services in areas such as crude oil and gas exploration and production, refining and processing, petrochemicals, energy, water treatment, and more. These include electronics and control systems, electrical systems, cooling systems, fluid processing equipment, valves, pipes and accessories, pumps, well completion, drilling fluids and chemicals, energy-related construction materials, and drilling and production services, among others.

King Salman Energy City has an industrial zone, divided into specialized areas that help grow the integrated value chain of energy goods and services. The five industrial areas include: general manufacturing, electrical equipment and appliances, fluids and petrochemicals, metal processing, and industrial services.

King Salman Energy City 'SPARK' contributes to localizing numerous energy-related industries and production technologies. It aims to attract diverse global investments related to industries supporting the energy sector, like Schlumberger. In 2017, Schlumberger became the first investor to lay the foundation stone for its new facilities in the city, establishing a center for manufacturing products for onshore oil and gas well drilling platforms, as well as related products for its supply chain.

King Salman Energy Park (SPARK) plays a pivotal role in the energy industry through its multiple factories and facilities. It is one of the outcomes of Saudi Vision 2030 aimed at enhancing economic diversification and supporting private sector growth while continuing to develop the energy sector. The economic impact is expected to be significant, with full development of the city by 2035 adding SAR22.5 billion annually to the gross domestic product and localizing over three hundred industrial and service facilities.

The renewable energy sector in the Kingdom presents significant opportunities concerning energy services and equipment, particularly following the Kingdom's launch of the Solar Energy Plan 2030 project in 2018. This is anticipated to transition the Kingdom from a developed nation reliant on oil exports to one that exports sustainable energy, leveraging its abundant natural resources. These resources enable the establishment of environmentally friendly industries harnessing the energy of the sun, wind, and silica-rich sand.

These components provided the Kingdom with significant capabilities in the field of energy services and equipment. Its research and industrial facilities focused on developing highly efficient solar cells using various technologies and localizing the manufacturing of solar panels, inverters, solar trackers, and solar panel reliability testing laboratories, as well as the advancement of energy storage technologies and cost reduction.

Efforts to establish advanced industries in the field of equipment continued through the Water and Energy Research Institute at KACST, which, in turn, worked on implementing twenty-three projects related to solar energy sources. These initiatives included the establishment of a 'Photovoltaic Solar Panel Reliability Laboratory,' the first of its kind in the Middle East and North Africa region (MENA), capable of testing photovoltaic solar energy products under international testing standards (IEC Standards).

Research efforts in the energy equipment industry led to the establishment of KACST in 2010, marking the inauguration of the first solar panel production line with a capacity of fourteen MW per year. In 2016, the city further expanded its infrastructure by constructing a cutting-edge production line capable of producing one hundred MW per year, leveraging state-of-the-art automated technologies for the manufacture of top-tier solar panels. The factory was diligently operated and maintained by proficient Saudi personnel, ensuring its optimal functionality and productivity.

For its part, Saudi Aramco continued its role in strengthening the energy system and contributing to the transfer and localization of technology. In 2018, it signed a partnership agreement with National Oilwell Varco (NOV) to establish an integrated, world-class joint project for manufacturing high-specification onshore drilling rigs, drilling equipment, and devices. Facilities were also set up to provide after-sales services in Ras al-Khair, located east of the Kingdom.

The project contributes to developing the business portfolio of the oil field services and equipment sector that the Saudi Aramco Development Company is working to establish. Among its benefits is improving the supply system for Saudi Aramco, which has taken significant steps towards localizing oil field services. This begins with drilling services in the Kingdom, achieved through the establishment of a joint venture to operate onshore drilling equipment and devices, as well as another joint venture focused on operating drilling equipment in offshore areas.

Saudi Aramco continued its efforts in developing energy equipment and in 2022, launched the Arabian Rig Manufacturing Company (ARM), a joint venture with NOV Company. ARM aims to manufacture drilling rigs and their equipment, and provide after-sales services in Ras al-Khair, as part of efforts to support the localization of the drilling rig manufacturing sector, promote economic growth, create job opportunities, and develop local capabilities.