The Saudi oil giant Aramco and energy services company Baker Hughes announced on Tuesday the formation of Novel, a 50/50 joint venture to develop and commercialize a broad range of non-metallic products for multiple applications in the energy sector.
Novel's new facility is being developed at King Salman Energy Park in the country's eastern region. The 50-square-kilometer energy city megaproject aims at positioning Saudi Arabia as a global energy, industrial and technology hub, according to Aramco's statement.
Initially, the facility will produce onshore non-metallic pipelines, including reinforced thermoplastic pipes from composite materials.
The joint venture is based on a shareholders agreement signed in February this year during Aramco's fifth In-Kingdom Total Value Add Forum & Exhibition. The collaboration will seek out new opportunities in oil-based products, which will not only offer performance benefits but also aims to reduce carbon emissions, according to the statement.
The new project, with an undisclosed investment amount, will also help to foster growth of an emerging sector in line with Saudi Arabia's Vision 2030 that aims to diversify the economy away from oil, the statement said.
The two companies sought Turkey's permission to operate in the Middle East and North Africa (MENA) region on April 16 this year, and the Turkish Competition Authority granted permission on Dec. 1 to the new manufacturing joint venture.
Baker Hughes has two affiliates operating in Turkey, and as part of a market sharing arrangement, the company needs official permission under international commercial law to form a joint venture with a foreign company to operate in MENA where Turkey is one of the region's 19 countries.
By Busranur Begcecanli