Aramco and Baker Hughes commence construction on non-metallics joint venture in Saudi Arabia

• Newly formed company will be called Novel Non-Metallic Solutions Manufacturing (Novel)
• Aramco brings the resources and perspective of a pre-eminent energy company to the JV and Baker Hughes as a world-class energy technology company and manufacturer, providing deep commercial and technical expertise
• Through its state-of-the-art manufacturing processes, R&D and localization focus, Novel expects to partner with customers to advance innovation in the energy sector

Aramco and Baker Hughes (NYSE:BKR) have announced the formation of Novel, a 50/50 Joint Venture (JV) to develop and commercialize a broad range of non-metallic products for multiple applications in the energy sector. A ceremony was held today at the project site to commence construction, which was attended by Aramco’s Senior Vice President for Technical Services Ahmad Al Sa’adi and Baker Hughes Chairman and CEO Lorenzo Simonelli.

The ceremony comes after both companies signed a memorandum of understanding (MOU) to create a non-metallics JV in July 2019.  Novel’s new facility is being developed at King Salman Energy Park (SPARK), in Saudi Arabia’s Eastern Province. SPARK is a 50-square-kilometer energy city megaproject which will position Saudi Arabia as a global energy, industrial and technology hub. Initially, the facility will produce onshore non-metallic pipelines – including reinforced thermoplastic pipes (RTP) – from composite materials.

The JV is based on a shareholders agreement signed in February this year during Aramco’s 5th In-Kingdom Total Value Add (IKTVA) Forum & Exhibition. The JV aligns with Aramco’s strategy to seek new opportunities in oil-based products, which not only offer performance benefits but also aims to reduce carbon emissions. It also supports Saudi Arabia’s efforts to expand its commercial ecosystem and promote domestic investment. The new facility will not only create jobs, it will also help foster growth of an emerging and innovative sector in alignment with Saudi Arabia’s Vision 2030.

Aramco’s Senior Vice President for Technical Services, Ahmad Al Sa’adi said: “Non-metallic products are reshaping the industries and products we all depend on because they are more reliable, cost effective and offer sustainability benefits. The partnership with Baker Hughes reinforces our commitment to expanding the use of innovative non-metallic materials in our operations to drive efficiency and reduce maintenance and replacement costs, while also positively impacting the Kingdom’s economic development through job creation and local expertise.” 

Neil Saunders, Executive Vice President, Oilfield Equipment, Baker Hughes, said: “As an energy technology company, we are investing for growth in strategic areas like non-metallics, and our deep background in non-metallic product development will benefit a wide range of industries. Aramco’s vision to expand its product development in the region aligns with our vision to support innovation and manufacturing in Saudi Arabia.”

Non-metallic products are being deployed in a variety of industries, from the oil and gas sector to automotive, building and construction, packaging and renewables. In addition to being more sustainable, these advanced materials make them lighter than their conventional counterparts and resistant to corrosion.