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Following the auspicious inauguration of Global PipeCompany (GPC)’s new administration building – attendedby no less than the Governor of the Eastern Province –all eyes are now on the Jubail-based company as it movesforward at a pace with its part in one of the Kingdom’s moststrategically important energy expansion projects, SaudiAramco’s MGS-II. Euroasia Industry learns more abouthow Saudi Arabia’s prudent localisation policies are drivingthe company’s growth ambitions. Sarah Pursey reports.

The 6th of November 2016 is a datethat will undoubtedly go down in historyas a defining milestone moment for GlobalPipe Company – the GCC’s leading pro-ducer of Longitudinal Submerged ArcWelded (LSAW) pipes for the oil, gas,petrochemical, power generating and civilengineering industries and markets.Attended by more than 150 guests, theday marked the official grand opening cer-emony of a large administration buildingfor GPC – a strategic partnership betweenGermany’s Erndtebruecker Eisenwerk(EEW), Saudi Steel Pipe Co. (SSP), localbusinessman Mr Ahmed Al Khonaini andPan Gulf Holding (PGH). While GPC’sinception can be traced back to 2009, thegrand opening of the new office buildingin Jubail Industrial City undoubtedlymarks a turning point for GPC, and atremendous source of pride, given the aus-picious guests that graced the gatheringwith their presence. The GPC team was truly honoured to

receive His Royal Highness Prince Saudbin Naif bin Abdul Aziz (Governor of theEastern Province) and His Highness PrinceSaud bin Abdullah bin Thunayan Al-Saud(Chairman of the Royal Commission forJubail and Yanbu) at the ceremony. Thecompany’s management were likewise veryproud to welcome His Excellency EngineerKhalid bin Abdulaziz Al-Faleh (the Ministerof Energy, Industry and Mineral Resources)and a high-level Saudi Aramco delegation tothe momentous event. Indeed, in what willundoubtedly be remembered as a hugemilestone for GPC, the inauguration dou-bled as a celebration of just how far thecompany has come in a matter of years,while offering GPC the opportunity torecognise those individuals and organi-sations that have been so crucial to its success.

By royal appointmentAccordingly, the royal visit was deemed “ofgreat importance” to GPC by its ManagingDirector, Mr Ahmed Hamad Al-Khonaini,who extolled the abundance of “moral sup-port” that the presence of the two princesafforded the company, reinforcing GPC’s“commitment to work hard” and to con-tinue forward on its “march of success”.Certainly, since the Kingdom’s very incep-tion, Saudi Arabia’s leaders have beenhighly supportive of the private sector,including via development of essentialinfrastructure that has helped advance theprospects of a diverse array of investmentsacross the country – not least those inthe vital oil & gas industry, noted Mr Al-Khonaini. “This strong support provided tothe private sector – endowed by the gov-ernment of the Custodian of the Two HolyMosques, King Salman bin Abdulaziz –has certainly not slowed down, even intough economical periods,” enthusedGlobal Pipe’s MD, addressing the twoprinces and the energy minister at the cer-emony. “This unlimited support has beenprovided based on the insight of the gov-ernment about the importance of thissector in securing growth for the country’seconomy. Your visit to our facility today isthe greatest confirmation for this policy.”Clearly, His Royal Highness Prince

Saud bin Naif bin Abdul Aziz’s admirableefforts to make the Eastern Provincehighly attractive for investors, alongsidethe confidence granted by the RoyalCommission for Jubail and Yanbu underHis Highness Prince Saud bin Abdullahbin Thunayan Al-Saud, have been instru-mental factors in Global Pipe Company’stremendous progress over the years. Sotoo has what GPC’s MD described as“the inordinate role” that Saudi Aramcohas played, and continues to play, in sup-

porting local industry – improving localcontent and generating growth in thenational economy in so doing. In recipro-cation, the presence of a high-rankingdelegation from the Kingdom’s state-owned oil giant – including Mr AbdullahAl -Sugheir (Saudi Aramco’s Manager –Project Procurement), Mr Ahmed Al-Zahrani (Head of the Supplier RelationDivision), Mr Omar Al-Katheer (Head ofthe Supplier Support Unit) and MrHussam Al-Sendi (Superintendent of theVendor Inspection Department) – is tes-tament to the important role that GPCitself has grown to play as the pipe-pro-ducing partner of choice in Saudi Arabia.

Aramco approval opens doorsGPC’s journey to prominence as a pre-ferred supplier to the mighty SaudiAramco started back in 2009, although asMr Christoph Schorge, Vice Chairmanof the GPC board of directors and repre-sentative of EEW pointed out in hisspeech at the recent event, the high levelof expertise at play throughout the much-praised pipe-making operations in Jubailstretches back far further than GPC’sinception. “As a manufacturer ofLongitudinal Welded Pipes with more ‡

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than 40 years’ experience, we have a well-established customer base in the MENAarea,” reflected Mr Schorge. “When ourpartner Pan Gulf asked us in 2009 aboutestablishing a pipe mill in Saudi Arabia,we did not hesitate at all, and starteddeveloping our business model. Shortlythereafter, Saudi Steel Pipe and MrAhmed Al Khonaini joined the co-opera-tion. With that unique partnership inplace between those four strong parties,the joint venture agreement was signed inApril 2010. From then on, the rapid butmost importantly the positive develop-ment of EEW Global Pipe Company hasbeen unstoppable.”Mr Schorge noted that the three local

partners – Pan Gulf, Saudi Steel PipeCompany and Mr Al Khonaini – madehuge strides toward fulfilling the local for-malities and management of the construc-tion work, and did an “amazing job” infulfilling such endeavours. At the sametime, EEW was tasked with advancing“production related topics”. Mr Schorgesaid that given the experience EEW hadaccumulated from establishing four pipemills prior to the GPC project in Jubail,his team knew they must focus on twocore aspects – machinery and humanresources. “Based on that, we trusted onlyin first-class machinery manufacturers,including the companies GräbenerMaschinentechnik and Weldec.” Ofcourse, no benefit can be derived fromexcellent machinery if a company lacksthe skills to operate it effectively, noted MrSchorge, whose team was mindful todevelop a detailed training programme forGPC’s staff – at EEW’s mills in Germany,Korea and Malaysia. “All selectedemployees, whether machine operator,quality inspector or salesman, had to passthe training program at our EEW mills.”The Technical Assistance Agreementbetween Global Pipe Company and EEWprovided the framework for that trainingprogramme, the target being to secure theknowledge transfer to GPC’s mill in Jubail.With that task accomplished, GPC’s millentered into production in 2012 – in sodoing, it became the only steel pipe manu-facturer in the Middle East with the capa-bility of producing line pipes with outsidediameters up to 62'' and wall thicknessesup to 2''.Shortly thereafter, GPC was successful

in obtaining the required approval fromAmerican Petroleum Institute, after whichit applied for Saudi Aramco’s approval –

and to the company’s surprise and delight,such approval was awarded remarkablyswiftly, offering huge benefit in terms ofadvancing the business, as Mr Schorge’sgratitude at the opening ceremonyattested. “I would like to take this opportu-nity to thank Saudi Aramco, especially theVendor Inspection Department (VID) andConsultancy Service Department (CSD),for the great support we are receiving dailyfrom them,” he enthused, going on to notethat being added to the oil giant’s vendorlist had opened “huge doors” in terms ofGPC’s outlook.

Committed to the KingdomIndeed, following Aramco approval, thecompany has gone on to undertake sizeablecontracts for numerous nationally-criticalpipeline developments, including themighty Shedgum project, whereby GPCdelivered 150km for the East-Westpipeline, followed by the Al-Fadhli pipelineproject, on which the company supplied afurther 27km. Now, however, all eyes areon GPC to deliver the lion’s share of pipesrequired to expand the Master Gas System– an enormous contract known as MGS-II.For its part, the Jubail-based manufacturerwill deliver 550km of pipes in differentthickness and diameter ranges up to 56" onthis ambitious project of national impor-tance. GPC’s Managing Director Mr Al-Khonaini expressed how “very proud andhonoured” his company was to participateeffectively in that ambitious project, which,once completed, is expected to signifi-cantly boost gas transportation across theKingdom, extending the pipeline acrossthe Eastern, Western and Central region. Encouragingly, GPC’s General Manager,

Mr Maher M. Fkaier, advises that the com-pany is proceeding well with delivering onMGS-II, having successfully ramped upoutput since last speaking with EuroasiaIndustry in June 2016. “Even since our pre-vious interview, we have further increasedour daily output, to an average of 130. InOctober, for example, we delivered 52.5kmfor the project. We are therefore very muchworking to schedule and are confidentthat we will finish the project by May2017,” he tells us.Of course, as both Mr Schorge and

GPC’s Managing Director Mr Al-Khonainiwere keen to elucidate at the inauguration,the considerable resources channelled intoadvancing Global Pipe Company should beviewed as proof of the four partners’ com-mitment to Saudi Aramco’s localisation

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policy. The ‘In Kingdom Total Value Add’(IKTVA) programme recently launched bythe state-owned oil company to improvelocal content and to generate growth of thenational economy is “the best reference”for that admirable policy, noted Mr Al-Khonaini, who enthused that “Global PipeCompany was and remains one of the ben-eficiaries of that important programme.”

Conducive investment environmentCertainly, leading on from that, GPC’s MDwas keen to highlight the crucial role thatthe Royal Commission for Jubail andYanbu has played in supporting the region’sindustrial sector. “The Royal Commissionwas and is still the main partner for all oursuccess since the beginning of the projectin 2010. Global Pipe Company has nowbecome, thanks to the confidence grantedby the Royal Commission for Jubail andYanbu, the main local supplier for weldedsteel pipes in the Kingdom,” pointed outMr Al-Khonaini. “We are proud of beingone of the most important service providersfor the oil & gas sector and refined and liq-uefied products.”Likewise, speaking as a foreign investor,

Mr Schorge was most enthusiastic indescribing the conducive business climatecreated from a raft of progressive policiesset forth by the Kingdom’s leaders. “YourHighness, please let me express to you oursatisfaction with the investment environ-ment in the Kingdom of Saudi Arabia,”he began. “The political stability of thecountry, the great projects and opportuni-ties that the Saudi economy is offering, andthe high qualification and motivation ofyoung Saudi graduates is making theKingdom of Saudi Arabia a very attractivelocation for foreign investors. Vision 2030is making the Kingdom even more attrac-tive. We are proud to be part of that vision.”

New line, new opportunitiesSupported by Saudi Arabia’s astute and pri-vate-sector-friendly government, GPC’sadvancement has certainly been impressivein terms of resource mobilisation and pro-duction capacity expansion. Looking ahead,the firm sees myriad opportunities forgrowth across the Kingdom and the widerGCC region – and, enthused by themomentous royal visit and the mostvaluable support demonstrated by SaudiArabia’s leaders, the company is investingaccordingly. “In the Board Meeting the dayafter the inauguration of GPC’s new facility,our Board made the decision to go for a

second manufacturing line,” reveals MrFkaier. “The pre-bending machine that weintend to add will substantially improve ourposition, given the heavy thickness pipesthat are often required for the local market.”GPC’s new investment will see it devel-oping a completely new line – a move set tooffer greater flexibility, asserts the GM. “Atthe moment, we only have one line –designed to cover the whole size rangerequired in our target market. That existingline is able to provide all sizes in ourcapacity matrix, although some limitationsexist to provide the output required for ourprojects. Following implementation of ourexpansion plan, we will have two lines –one dedicated for heavy-thickness pipeswith smaller diameters and one dedicatedfor the manufacturing of large-diameterpipes with lower thicknesses. In doing so,we will not only double our output but willalso ensure that we roll each size on thesuitable machines and improve the qualityaccordingly.” Moreover, a full second linewill enable the company to run two orderssimultaneously. “As well as added flexibility,this approach will allow us to deal withsmaller orders, as is often required by inter-national players. We are currently losing outon such opportunities as our single lineis busy with bigger projects.”Having received Saudi Aramco approval

earlier in 2016, there is clearly much forGPC to be positive about, as Mr Al-Khonaini outlined at the recent event. “Welook forward to providing greater servicesfor all the new projects – not only in thefield of pipelines, but also in the field ofdrilling,” enthused the MD, whose com-pany was recently approved by SaudiAramco for manufacturing Well Casingsused in the drilling and operation of wellsfor oil & gas exploration.Of course, Saudi Aramco’s approval

not only opens the door for further proj-ects in Saudi Arabia but also in the widerGCC region. “We currently have Aramcoapprovals for non-sour material, sour mate-rial, and well-casings – meaning that wecan provide not only traditional pipes butalso value-added and high-end productsfor sour service lines and transmissionactivity,” informs Mr Fkaier, who goes onto advise that while those approvals relatespecifically to Saudi’s state-owned oilgiant, they are good references for thewider GCC where the same technologyand approach are being implemented onprojects of a similar nature in terms of sizeand material.

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Celebrating valuable supportWithout question, Global Pipe Companyhas come a long way since its formationand the recent inauguration event offeredGPC’s management an opportunity toexpress their sincere gratitude to the keyplayers that have been so vital to the firm’sswift progress. This took the form of anaward ceremony at the close of the cere-mony, with an award bestowed on MrKhaled Al-Faleh (the country’s Minister ofEnergy); Saudi Aramco; GPC’s Germanbusiness partner EEW; the company’sfinancial partners SIDF, SABB and BSF;and its steel supplier for the MGS-II

project, Baosteel. Global Pipe Company’sBoard of Directors collectively presenteda special award to His Royal HighnessPrince Saud bin Naif bin Abdul Aziz(Governor of the Eastern Province) for hiscontinuous and most valued support. As an extension of that valuable sup-

port, GPC’s rise to prominence can beseen as an outcome of the country’s for-ward-thinking leadership – specifically,Vision 2030. An ambitious yet achievableblueprint, Vision 2030 expresses SaudiArabia’s long-term goals and expectations,while reflecting the country’s strengthsand capabilities. The nation’s determina-

tion to become a global investment pow-erhouse – to hold strong investmentcapabilities, which its leaders will har-ness to stimulate KSA’s economy anddiversify its revenues – will be crucial tofulfilling that. Moreover, Vision 2030will see Saudi Aramco transformed froman oil-producing company into a globalindustrial conglomerate. And GlobalPipe Company remains resolutely com-mitted to supporting such an endeavour– supplying quality products to strategi-cally significant projects, and enhancinginfrastructural advancement across theKingdom in so doing. o

www.globalpipe.com.sa