Italy's Saipem signs MoU with Saudi construction company AHQ

Agreement to pave the way for JV focussing on onshore construction and EPC projects in Saudi Arabia

  
Image used for illustrative purpose. A staff member gestures on the Saipem 10000 deepwater drillship in Genoa's harbour, Italy, November 19, 2015.

Image used for illustrative purpose. A staff member gestures on the Saipem 10000 deepwater drillship in Genoa's harbour, Italy, November 19, 2015.

REUTERS/Alessandro Garofalo

Italy-based engineering company Saipem announced on Tuesday that it has signed a Memorandum of Understanding with the Saudi construction company Abdel Hadi Abdullah Al Qahtani & Sons Company (AHQ).

With this agreement, both companies set the path towards the creation of a Joint Venture (JV) in Saudi Arabia, combining Saipem's EPC competences and skills with AHQ's knowledge and experience in logistics, construction and supply chain, the company said in a press statement

It said the JV would aim to maximise local value creation and become a first tier player in the execution of Onshore construction works as well as of Onshore pipeline Engineering, Procurement and Construction (EPC) projects.

Maurizio Coratella, Chief Operating Officer of the Onshore E&C Division, said: "Saudi Arabia has been a core market to Saipem from the outset and our ambition is to maintain our EPC leading role in the country. We are committed to establishing this Joint Venture together with AHQ with the aim of harnessing synergies to support our key Client Saudi Aramco."

He said a central feature of the partnership is "the possibility to operate in compliance with the requirements of the IKTVA (In-Kingdom Total Value Add) programme launched by Saudi Aramco as an integral part of its contracts to achieve 70% localisation of spending by 2021."

(Writing by Syed Ameen Kader; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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