American oilfield services and equipment provider McDermott International intends to build a fabrication yard at a shipbuilding complex planned by national oil giant Saudi Aramco on the kingdom’s east coast.
The two companies signed a memorandum of understanding for the first major investment in the complex.
It is the latest part of Saudi Arabia’s plan to diversify the economy from its reliance on oil.
The complex at Ras Al Khair will cost more than $5 billion to build, according to Aramco. Saudi officials hope it will jump start local manufacturing rather than continuing to lean on equipment imports.
McDermott plans to build and outfit offshore oil and gas platforms at the new yard. A source said the companies aimed to sign a final agreement by next year, with Aramco providing land for the project by the end of 2019.