International Maritime Industries Company (IMI), a joint venture company, can now formally start business, following completion of all conditions, including entry into a loan agreement with a Saudi lender.
IMI is a JV between Lamprell, Saudi Aramco Oil Company, the National Shipping Company of Saudi Arabia, and Hyundai Heavy Industries, which will be responsible for the management of the multi-billion dollar maritime and offshore yard being built in Saudi Arabia’s Ras Al-Khair.
The IMI JV was officially launched in January 2018. The yard is expected to be partially operational by 2019 with full functionality reached by 2022.
Lamprell informed on Friday that, before the JV could formally start business, an important condition was the entry by IMI into the loan agreement with the proposed government lender, the Saudi Industrial Development Fund. In addition to the offtake agreements and significant investment made by the Saudi government in the facility’s infrastructure, the loan agreement is expected to be a cornerstone for the success of the IMI yard.
The construction process at the site is under way with dredging and associated activities in progress. The partners have made significant progress in creating the business infrastructure, including the management organization, the internal governance structure and the detailed business plan.
This follows the first capital contribution by each partner in accordance with their pro rata share and in line with the original drawdown schedule. Lamprell’s first tranche amounted to $20 million which was invested in 2017, and will be used to pay for initial start-up costs of the business including staff hire and long lead item procurement. Lamprell’s anticipated total equity contribution over the construction period is up to $140 million.
It is planned that, pursuant to one of the offtake agreements, ARO Drilling will order 20 jack-up rigs from the IMI yard over the next ten years. Prior to the jack-up rig construction zone of the maritime yard becoming operational, significant component parts of the first two rigs are expected to be subcontracted to Lamprell’s UAE facilities. ARO Drilling and the IMI have recently selected the LJ43 rig design collaboratively developed by Lamprell and GustoMSC.
Following successful registration of the IMI joint venture company, the first IMI board meeting was held in late December, at which the JV partners agreed to the following key appointments: Abdallah I. Al Sadaan (Saudi Aramco’s Senior VP Finance, Strategy and Development) has been appointed as Chairman of the IMI board with Lamprell’s Christopher McDonald as Vice Chairman. Tony Wright is Lamprell’s second IMI board member and Fathi K. Al-Saleem has been appointed as the CEO for IMI.
Christopher McDonald, CEO, Lamprell, said: “Lamprell has been working closely with its partners on the establishment of the IMI business over the past few months and we are very pleased to see such tangible progress towards the operational phase, now that the conditions under the shareholders’ agreement have been completed.
“We are proud to be part of this major project as IMI has the capability of becoming a leading regional and global service provider to the rig and vessel markets. A very welcome progress is also the selection of our new LJ43 jack-up rig designed with GustoMSC for the rigs under the offtake agreement, this will further strengthen Lamprell’s position in our traditional market.”