Minister of Energy: 116 components targeted for localization in the sector.. providing investment opportunities worth 250 billion riyals

Prince Abdulaziz bin Salman, Minister of Energy, revealed that out of 415 components in the energy sector, 116 components have been identified for localization in the first phase, creating investment opportunities worth up to 250 billion riyals.

The Minister of Energy explained, through a presentation he gave to the Iktiva 2025 Forum and Exhibition yesterday, that the “Nawtan” program was launched to link suppliers with demand centers and government agencies to act as a platform to enable and enhance current localization programs, as the program aims to maximize the contribution of suppliers to achieving the localization goal in the energy sector, improve the balance of payments by increasing exports, and enhance the competitiveness of local manufacturing by building a sustainable supply chain.

The Minister of Energy pointed out that the Energy Localization Forum held last October resulted in investments worth 104 billion riyals to date, through the joining of more than 90 suppliers to the “Nawtan” program to benefit from localization opportunities throughout the Kingdom, indicating that the Ministry’s ambition for localization goes beyond local content to include localization of comprehensive value chains from beginning to end, including sub-components and raw materials, all the way to the final product.

The Minister of Energy explained that a special committee has been allocated to localize the components of the energy sector with the aim of advancing localization efforts, developing comprehensive localization plans, unifying and implementing them, empowering investors, improving infrastructure and following up on the achievement of national targets, indicating that the petrochemical sector will be the most important element in the future, stressing that this will not only be in relation to plastics, but in all materials and polymers that will be produced.

The Minister of Energy indicated that Saudi Arabia will enrich, sell and produce “yellow cake” from uranium, which is a concentrated powder of uranium free of impurities, used in making uranium fuel for nuclear reactors.

The Minister of Energy indicated that there is progress in achieving the oil and gas sector’s ambitious targets, through 6 major projects with investments amounting to about 94 billion riyals, namely, the first phase of developing the Jafra gas field 2025, the gas storage center in Hawiyah, Onaiza, the Tanajib gas project, developing the “Marjan” and “Al-Bari” fields, gas compression projects (9 projects), and developing the Zuluf oil field, as there are 31 components at the forefront of the sector’s priorities targeted for localization. The presentation given by the Minister of Energy indicated that three major projects were recently announced to manufacture oil and gas components, namely, Compressors implemented by Baker Hughes, control valves and devices “Emerson”, and pressure vessels and valves “Laresn & Toubro”, stressing the existence of ambitious plans for the fourth phase of expanding the main gas system, in addition to launching major initiatives in the retail fuel sector to open up new opportunities for localization.

The presentation explained that the growth of the petrochemical sector drives localization through diversification of products in the chemical industries. It is expected that the production of basic and medium petrochemicals will increase by 50%, and local demand for petrochemicals will grow driven by different strategies and mega projects. This creates an opportunity to diversify and expand the scope of specialized and industrial chemicals to meet the growing local demand, noting that about 50 chemical components are at the forefront of localization priorities.

He pointed out that the Oil Sustainability Program enhances efforts to localize the Kingdom’s transformation industries through the main polymer conversion industries. In the renewable energy production sector, the presentation explained the existence of bold ambitions to generate renewable energy in the Kingdom, represented by offering 20 gigawatts annually to stimulate localization, as it targets the production of 44 gigawatts through different stages in the solar and wind energy production sector to meet the growth in local demand by 2030.

He explained that the Kingdom’s ambition is to reach 130 gigawatts of renewable energy in order to have 20 percent of energy in reserve; This is because the Saudi economy is expected to grow more than expected, as there are 5 components at the forefront of localization priorities in the sector.