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Saudi Arabia Braces for Launching Energy City ‘SPARK,’ Set to Boost GDP by 6%

Saudi Iktva Forum and Exhibition 2018, Omran Haider
Saudi Iktva Forum and Exhibition 2018, Omran Haider
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Saudi Arabia Braces for Launching Energy City ‘SPARK,’ Set to Boost GDP by 6%

Saudi Iktva Forum and Exhibition 2018, Omran Haider
Saudi Iktva Forum and Exhibition 2018, Omran Haider

Saudi Arabia is preparing to launch the King Salman Energy Park (SPARK), a company managed by Saudi Aramco, with a $1.6 billion worth of investments allocated for funding its infrastructure.

One of the Saudi Iktva Forum and Exhibition 2018 key organizers, Ahmed Al Ghamidi, said SPARK will create some 100,000 job opportunities for Saudi youth and will contribute some $6 billion to gross domestic product (GDP) each year.

Held November 26-27 the Forum offered presentations, workshops and panels on best practices in navigating such areas as regulatory requirements, financing, R&D and talent development.

The city, which will be developed over 50-square km of land allocated for energy-related industries. SPARK will help localize over 300 new industrial and service facilities, and create a global industrial hub for energy-related manufacturing services.

Facilities offered include a dry port, shared services, a commercial and residential area, and highly specialized training centers.

Ghamidi, addressing an audience at the Aramco-soinsored Iktiva Forum, said that SPARK will not only promote localization but also emerge as the beating heart of Gulf Cooperation Council countries. Designed according to world-class standards, the city is strategically located only 40 km away from the oil giant, Aramco headquarters in Damam, and an hour’s drive away from the King Fahd International Airport.

The city is also being erected in proximity to major highways, railways and ports, namely the King Abdul-Aziz Seaport and the GCC Highway & Railway.

“We are working closely with government and non-government organizations to ensure services at the city are provided,” Ghamidi noted saying that SPARK will also host a livable community.

Up to 60 percent of SPARK’s first phase construction contracts, covering a stretch of 13 square kilometers, have been reserved by major international companies, such as the world leading oil and gas technology provider Schlumberger.

Saudi Aramco also plans for two thirds of the city to be an industrial zone to promote local content. The city will also include specialized training centers, a logistics and dry port, shared services and commercial and residential areas.

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Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)
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Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)

Saudi Arabia has long followed a clear and transparent approach to preserving stability in global energy markets. Historically, it has consistently adhered to all decisions issued by the OPEC+ alliance and played a leading role alongside other producers to ensure compliance and promote the collective good.

Recently, the Kingdom briefly increased production volumes. However, the additional output was neither marketed domestically nor exported abroad. Instead, it was directed as a precautionary measure to strengthen strategic reserves, improve supply flows between the country’s eastern and western regions, and rebalance stocks held in overseas storage facilities.

Asharq Al-Awsat reached out to energy specialists to understand the significance of this move for energy security. Experts explained that building strategic reserves allows Saudi Arabia to respond swiftly to customer needs in the event of political crises, regional wars, adverse weather, or other unforeseen disruptions.

Fouad Al-Zayer, former head of data services at OPEC and an energy expert, said the Kingdom maintains millions of barrels in storage both inside and outside its borders. These reserves serve as a buffer during emergencies, enabling the country to compensate for supply shortfalls within a short timeframe. He emphasized that this stored crude is strategically critical in the face of geopolitical tensions and conflicts.

According to Al-Zayer, Saudi Arabia relies on an extraordinary reserve capacity unmatched by any other producer. The country currently produces more than 9 million barrels per day, with the capability to pump even higher volumes if needed. He noted that Saudi reserves alone account for 3 million barrels per day out of roughly 5 million barrels in global spare capacity, underscoring Riyadh’s central role in stabilizing markets and upholding its commitments under OPEC+ agreements.

He added that Saudi Arabia also hosts the International Energy Forum, which works to improve data quality and transparency in the sector. In June, the Kingdom’s output reached about 9 million barrels per day, with the modest increase attributed to logistical considerations. Al-Zayer stressed that it is common for producers to temporarily boost production to support maintenance operations or replenish storage, without impacting the broader market, since these barrels are not immediately traded.

He reiterated that Saudi Arabia has always honored OPEC+ production targets and has played a pivotal role in encouraging other members to meet their quotas.

Meanwhile, Dr. Mohammed Al-Sabban, former senior adviser to the Saudi Minister of Petroleum, explained that the Kingdom has consistently proven itself a reliable and secure supplier to global energy markets. He noted that Saudi Arabia’s recent statement clarified the reasons behind the June production uptick, emphasizing that the additional oil was neither destined for local consumption nor for export but was solely intended to refill domestic and foreign storage. He said such measures do not represent any breach of commitments, unlike the practices of some other countries.

Al-Sabban pointed out that Saudi Arabia has often gone beyond required cuts to help stabilize markets. Even the recent production increases, he said, fall within the scope of voluntary adjustments agreed upon by OPEC+ members. He noted that in July, Saudi Arabia raised production in line with credible studies indicating the market could absorb these volumes without disruption.