Saudi Arabia to meet oil export demands with new shipbuilding complex

Saudi Arabia plans to build a maritime complex on its east coast, with shipbuilding capability, to provide sufficient capacity for exporting oil, according to Energy Minister Khalid Al-Falih. The country will eventually have a shipping fleet that will match its oil capabilities, and also saying that Saudi Arabian Oil Co., or Aramco, will need more tankers to meet global demand.

Oil prices have rebounded more than 70% from the 12-year low reached earlier this year as a Saudi Arabian-led OPEC strategy to pressure rivals with lower prices slowly eliminates a surplus in global supply.

The Organization of Petroleum Exporting Countries (OPEC) expects demand for its oil will rise to about 33 million barrels a day next year, 142,000 a day more than in June, according to the group’s monthly report, and Saudi Arabia is producing at close to a record. Production outside OPEC is expected to fall by 900,000 barrels a day this year, the largest decline since 1992, according to the International Energy Agency (IEA).

Crude oil will rise to a range of US$50 to US$60 a barrel until at least 2018 as demand rises, Kuwait’s acting oil minister Anas Al-Saleh said.

Saudi Arabia, along with the United Arab Emirates and Kuwait, is expanding its energy industry, driving investments in the region to US$900 billion over the next five years, said Apicorp.

Arab Petroleum Investment Corp. (Apicorp), a multilateral energy-finance lender based in Dammam, Saudi Arabia, and National Shipping Co. of Saudi Arabia plan to buy as many as 15 oil tankers via a new US$1.5 billion fund. Apicorpwill own 85% of the fund and National Shipping the rest. National Shipping said that investments will be allocated in US$500 million increments.

Apicorp plans to issue Islamic bonds to diversify its portfolio, which is mainly in petrochemicals. The lender has set up funds to focus on renewable energy projects and on transportation and shipping.