As the world’s largest producer and exporter of oil, Saudi Arabia presents many business opportunities.
Babe Ruth once exclaimed, “Yesterday’s home runs don’t win today’s games.”
For nearly 40 years, Dresser-Rand conducted business in the Middle East on a transactional basis. Then in 2009, management decided it was time to establish a permanent presence in this key region. In other words, it was time to step up to the plate.
To fulfill this strategic objective, it was decided that several facilities were needed to establish the desired services and capabilities. First, Dresser-Rand established a new service center in Abu Dhabi, United Arab Emirates in 2009 and formally committed to a new multi-purpose facility in the Kingdom of Saudi Arabia to be operational by 2011. The vision for Saudi Arabia was to be a regional hub providing engineering support for new projects, post order engineering services and training. Later, the investment in Dammam created a multi-purpose / multi-product facility combining packaging for the Middle East with a service base in Saudi Arabia.
Procurement Agreement Leads to First “Big Win”
Efforts to establish a permanent presence in Saudi Arabia led to the signing of a long-term Corporate Procurement Agreement (CPA) with Saudi Aramco in March 2009. Under the CPA, Dresser-Rand was selected as the first manufacturer to supply a full range of compressor and steam turbine products. The initial “big win” was a contract for 19 compressor systems destined for the Yanbu Aramco Sinopec Refining Company refinery project (YASREF). The project involved the construction and operation of a 400,000 barrel per day integrated petroleum refinery in the Yanbu Industrial City located on the west coast of Saudi Arabia along the Red Sea.
As part of this project, Dresser-Rand Arabia was responsible for packaging eight centrifugal compressors and all of the auxiliary systems, oil consoles, water consoles, and gas seal panels at a temporary facility in Jubail, Saudi Arabia. The work for the YASREF refinery project was completed at this leased facility where Dresser-Rand established a local team responsible for product and project engineering, supply chain management, packaging, testing, and quality control. Eleven Saudi engineering graduates were hired to leverage Dresser-Rand’s global capabilities in the region.
“Along with the initial hiring of local talent to bolster the project, an enormous amount of support also provided by our fellow employees in Olean, Painted Post and Wellsville, NY; Burlington, IA; LeHavre, France; and Santa Barbara, Brazil,” said Doug Craig, Dresser-Rand’s regional business leader for Saudi Arabia.
Dammam Second Industrial City Selected for D-R Facility
In parallel with the YASREF packaging activities, Dresser-Rand built its permanent facility in Dammam Second Industrial City. Representing a $53 million combined investment for engineering, construction, machine tools, and other equipment, the new facility has repair capabilities for all types of rotating equipment, regardless of heritage. It also includes offices, a training center, cafeteria, and a mosque.
According to Craig, “In Dammam, we have a comprehensive and multi-purpose center with a wide range of technical capabilities.” Plans are underway to include steam turbine blade peening, hot and cold coatings, weld repair and heat treating, hydro-testing, and helium leak testing. In addition to these services, Gimpel® valve repair and testing will be available.
The new facilities have the capability to package compressors with the ability to lift packages up to 120 tonnes. Craig adds, “We will also have single- stage steam turbine manufacturing capability with the ability to run steam turbines after manufacture or after repair. Moreover, our primary machine tools are CNC-controlled to provide the opportunity to establish some core parts manufacturing for the local market.”
High-speed Balance Machine In-Kingdom
The most unique element, Craig asserts, is the high- speed balance machine that can accept rotors up to 8 meters between bearing centers, 2.2 meters in diameter and 20 metric tons.
“This is a first for Dresser-Rand globally. Not to mention it is the only vacuum high-speed balance machine in the region. Our Middle East clients will no longer have to ship their critical rotors to Europe or the U.S. for this service,” notes Craig.
We are developing capabilities that are not widely available in-Kingdom. The convenient offering of local products and services ultimately provides additional value to our existing clients and creates a new network in which to expand our client base.
According to Craig, the location is critical for long- term business relationships in Saudi Arabia, because the Kingdom has major initiatives to encourage local content known as Saudization (the hiring, training and transfer of knowledge to the local population).
It is required that a certain percentage of employees are Saudi Nationals. Currently, in the oil and gas industry, the figure is reported to be approximately 35 percent. According to Craig, Dresser-Rand has been operating in the 65 to 70 percent range for the last three years. The company achieved this by hiring young, talented Saudis from day one. Today, 70 percent of the 58 Dresser-Rand employees based in Saudi Arabia are Saudi nationals.
“As part of this localization effort, we sponsored 32 young Saudis for training and development in key disciplines,” says Craig. This initiative with the country’s Human Resource Development Ministry encourages and knowledge transfer by subsidizing the training and offering sponsorships. Dresser-Rand partnered with the vocational school, Saudi Petroleum Services Polytechnic, which offers training in a number of disciplines, including welding, pipefitting, machining, and electric work. This three-year program has allowed us to develop our core staff of technicians for the new facility.
While building the facility, Dresser-Rand management addressed elements of Leadership in Energy and Environmental Design (LEED) aligning with company policy and standards. A “green” capacity that uses water from the wastewater treatment plant is in place, saving community resources.
Our investment in Dresser-Rand Arabia showcases the benefits of having a
service center located in Saudi Arabia. It is logistically challenging to move parts and machinery in and out of Saudi Arabia.
The “Babe” once commented that “the way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.”
Craig sums up the efforts by saying, “We’ll be able to save time and money for our clients by having a local presence in this region. Moreover, we will be much more responsive to local client needs and our quality of response will only improve as the skills, professional development and teamwork of the Dresser-Rand Arabia team matures.”