meed-logo

line1 line2 line3
SIGN IN / REGISTER

Aramco and DHL form joint logistics company

8 February 2024

Register for MEED's guest programme 

Supply chains have become a key issue for businesses over the past three years as the global economy emerged from Covid-19 lockdowns and then faced disruptive events such as the grounding of the EverGiven in the Suez Canal and the war in Ukraine.

More recently, Houthi attacks on shipping passing through the Red Sea have forced many vessels to travel around Africa rather than through the Suez Canal. This has delayed deliveries and driven up costs.

These disruptions, together with technological advances such as AI and a growing emphasis on sustainability, are forcing logistics providers and their customers to rethink how their supply chains are managed.

Locally in Saudi Arabia, the supply chain challenge is of particular importance as the kingdom seeks to overhaul its economy with large-scale capital expenditure projects as part of Vision 2030.

Joint venture

Two of the world’s largest players in their respective fields, Saudi Aramco and DHL Supply Chain, are responding to these challenges and aim to revolutionise logistics for the energy, chemical and industrial sectors by joining forces to incorporate a new joint venture company known as Asmo.

Salem Al Huraish, chairman of Asmo, described the new company in a speech at its launch in Khobar on 5 February as “a national champion that will reform the supply chain industry for the energy, chemical and industrial sector in the region.”

The company involves two industry heavyweights combining their expertise. “Aramco is a massive procurement beast, and is very successful. DHL is a logistics company. Everybody does their respective pieces separately,” said Craig Roberts, CEO of Asmo.

“Bringing the two together in a separate entity is something that hasn’t been done before. We believe there are massive efficiencies for the industry from doing this.”

The company, which has been planned for three years, comes at an opportune time for Aramco and DHL, but also for Saudi Arabia and the global logistics sector.

“We are launching a company with an ambitious vision to become a market leader in the Mena region,” said Wail Al Jaafari, Aramco executive vice-president of technical services.

“Asmo can offer world-class end-to-end supply chain solutions, creating value for customers while enhancing the resilience of their supply chain.”

New technologies

As well as changes in Saudi Arabia, the nature of the logistics industry is being transformed by new technologies, notably artificial intelligence (AI).

“We stand at a defining junction of the logistics industry where global trends are dramatically reshaping the landscape,” said Oscar de Bok, CEO of DHL Supply Chain. “The world is grappling with supply chain disruption, rising costs and the urgent goal for sustainability.”

Asmo intends to take a smart approach to revolutionising supply chain logistics. “It’s a lot about being smart,” said De Bok. “We talk a lot about deploying technology, digital marketplaces and warehouse technology … there is a lot of cool stuff being deployed, but it is not always rocket science. Some of it is pretty basic stuff you need to do,” he said.

The journey for Asmo is just beginning. It is a long-term venture that aims to develop a significant presence in the kingdom over the coming years.

“We are in partnership together and at the start of that journey right now,” Roberts added. “We are looking at our supply chains, gaining insights and asking how we get smarter. When we build in new warehouses, the question is, where do you put them? What technology do we deploy? We are in that discovery phase right now.”

One of the critical aspects of Asmo’s strategy involves assessing physical infrastructure needs. “For physical infrastructure, Asmo is assessing its options. We are looking at that right now. Aramco has a number of facilities for itself and its affiliates. We are looking at the best places to put the warehouses,” Roberts said.

Saudi infrastructure

As well as Asmo’s dedicated infrastructure, the Saudi government is also building infrastructure to support the kingdom’s logistics industry. “They’re putting infrastructure in place. They’re making it quite easy for us to do this. I think the support of the government is vital,” he said. 

Once established in the kingdom, Asmo aims to take its operations overseas. This is likely to involve expanding into other GCC markets first and then further afield. Both Aramco and DHL can support this strategy as both companies have significant operations outside Saudi Arabia. DHL is a global logistics player, and Aramco, while primarily being a Saudi company, has operations in many other markets worldwide, including the US.

If Asmo gets it right, the rewards are significant. “The supply chain and logistics market in the Mena region is worth around $100bn. Our goal is to have a major share of this. It is truly a new giant in the making,” said Al Jaafari.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11500762/main.jpeg
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Egypt’s Obelisk equity move merits attention

    27 February 2026

    Commentary
    Mark Dowdall
    Power & water editor

    The first phase of Africa’s planned largest hybrid solar and battery installation project reached commercial operations this week. While the 1.1GW Obelisk facility in Egypt is significant in capacity terms, the more interesting detail may lie in its ownership structure.

    Scatec secured the 25-year US dollar-denominated power purchase agreement in 2024 and moved the project into construction as majority shareholder with Norwegian Investment Fund for Developing Countries (Norfund).

    In November, France’s EDF acquired a 20% equity stake to join the project as a shareholder, while discussions with additional equity partners are at an “advanced” stage.

    With the development risk largely already absorbed and revenues secured under a long-term, dollar-denominated contract, the question arises: how are developers approaching capital allocation in the renewables market?

    Especially in emerging markets, sponsors must consider currency convertibility, sovereign exposure and overall balance sheet concentration. Bringing in partners after key milestones reduces that exposure without abandoning the asset.

    However, risk mitigation is not the only driver behind these decisions.

    This week, Masdar agreed to sell a 60% stake in a portfolio of wind assets in Portugal, a more mature European market with stable regulation and limited currency risk.

    Given the developer’s 100GW global target, this would seem a prudent way to recycle capital as part of an aggressive growth strategy.

    Meeting global climate targets will require sustained and rapid expansion of renewable capacity. Estimates suggest the world must add more than 1,100GW of renewables annually through 2030 to remain on track.

    Increasingly, as pipelines expand and capacity targets rise, developers are likely to weigh carefully when to hold assets and when to release capital.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15798541/main.jpg
    Mark Dowdall
  • Petrokemya awards contract for ethylene oxide project

    27 February 2026

    Register for MEED’s 14-day trial access 

    Petrokemya, an affiliate of Saudi Basic Industries Corporation (Sabic), has awarded China National Chemical Engineering Group Corporation (CNCEC) the main contract for an ethylene oxide catalyst project.

    The project covers engineering, procurement and construction (EPC) of a new 4,000-tonne-a-year (t/y) ethylene oxide catalyst production unit, encompassing multiple units for catalyst carrier washing and drying, as well as supporting utilities.

    Ethylene oxide catalysts are the core technology of the ethylene oxide industry chain, directly determining production efficiency, product quality and energy consumption of the process unit.

    Petrokemya is a wholly owned affiliate of Sabic, with its main petrochemical production complex located in Jubail Industrial City, in Saudi Arabia’s Eastern Province.

    The ethylene oxide catalyst project is the ninth contract awarded by Petrokemya to CNCEC since 2015. Previous jobs cover EPC works on seven specialty chemical projects and a project to upgrade and expand output capacity at Petrokemya’s main methyl tert-butyl ether (MTBE) production unit.

    Petrokemya awarded CNCEC the contract for the MTBE plant expansion project in November 2022, with the contractor starting work the following month.

    Through the project, the output potential of Petrokemya’s MTBE unit will increase from 700,000 t/y to 1 million t/y, purportedly making it the world’s largest single-unit MTBE plant.

    CNCEC achieved mechanical completion of the MTBE plant expansion project in August last year, and the project is now understood to have been commissioned.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15797372/main4837.jpg
    Indrajit Sen
  • Regulatory environment shifting for Kuwait oil and gas tenders

    27 February 2026

     

    Changes to the way key contracts are tendered in Kuwait have increased expectations that the country is shifting to a new regulatory environment for oil and gas projects.

    Contractors interested in bidding for Kuwait’s planned tender for a $3.3bn gas processing facility have been briefed that the country’s Central Agency for Public Tenders (Capt) will not be involved in the tender process.

    The exclusion of Capt from participating in the tender process has come at a time of increasing concerns surrounding the role of the agency, and has sparked speculation that it could be excluded from an increasing number of strategic tenders in future.

    Capt is responsible for reviewing technical and commercial evaluations of bids and verifying that bidding is competitive.

    Prior to its suspension in May 2024, Kuwait’s parliament was often blamed for blocking projects and halting the initiatives of Kuwait Petroleum Corporation (KPC).

    However, the suspension of parliament has not triggered an uptick in project activity at KPC, indicating that other problems are holding back decision-making.

    As time has passed, many stakeholders have started to view Capt as a key sticking point in the tendering process.

    One source said: “There is a lot of frustration within some parts of the country’s oil and gas sector about the time it takes for Capt to review everything and approve a tender.”

    Although this is not completely unheard of for small contracts tendered by Kuwait Gulf Oil Company (KGOC) to bypass Capt, it is unusual to see very large contracts bypass the agency.

    “A lot of people were very surprised when they heard that Capt would not be involved in this process,” said one source.

    “While the agency is resented by many in the sector that see it as a big reason for a lot of delays, it’s also highly respected for stopping corruption and bad practices.

    “If you look historically at which large contracts avoided a review by Capt or its predecessor, it was only the most critical and urgent projects.

    “The fact that this project is being permitted to side-step the agency’s process seems to mark a shift – and we could well see more big contracts following the same route in the future.”

    Past exceptions

    An example of a time period when key contracts were allowed to bypass Kuwait’s Central Tenders Committee (CTC), the predecessor to Capt, was in 1991.

    During this time, in the wake of the Gulf War, urgent contracts needed to be tendered by Kuwait Oil Company (KOC), including some related to extinguishing fires at oil wells, which were lit by retreating Iraqi troops.

    One source said: “I think the early nineties was the last time that large contracts were tendered by KOC without going through the relevant agency.

    “It is easier to bypass Capt when it is a KGOC contract, but it’s still very surprising to see it with a contract of this size.”

    If more contracts in the future are “fast-tracked” in the same way, it is likely that many stakeholders will welcome the effort to speed up tendering.

    However, some are worried that if the streamlined tendering model is replicated too widely, it could undermine checks and balances that stop corruption.

    “Kuwait is lucky as it has a system that makes corrupt practices very difficult to participate in,” said one source.

    “The country needs to be careful and make sure that it doesn’t undermine the rigour of the system by prioritising convenience.”

    Direct awards

    Another factor that has impacted expectations about the future of project tendering in Kuwait’s oil and gas sector is that the methods used for several large contracts have been recently tendered in other sectors.

    Key tenders that are impacting the discussions surrounding Kuwait’s oil and gas sector are the award of the $4bn Grand Mubarak Port contract to China Harbour Engineering Company in December and the award of a $3.3bn wastewater treatment plant contract to China State Construction Engineering Corporation in January.

    Both of those direct contract awards were government-to-government agreements that did not have an open tender process in Kuwait and were not approved by Capt.

    One source said: “These huge contract awards to Chinese companies without open tenders in Kuwait were extremely surprising.

    “If you had asked me at the start of last year whether this kind of thing would be signed off, I would have told you it’s highly unlikely.

    “I think there is no reason why we couldn’t see similar contract awards coming in the future in Kuwait’s oil and gas sector.”

    Another source said: “Just like the gas processing contract, these contracts awarded to Chinese firms seem to have side-stepped Capt in a way that is very surprising.”

    The planned $3.3bn gas processing facility is not the first time that KPC has tried to reduce its reliance on Capt for processing tenders.

    In April 2024, KPC launched its own tendering portal in an effort to streamline the tendering process for projects in the oil and gas sector.

    The portal was named the “KPC and Subsidiaries K-Tendering Portal” and is referred to as “K-Tender” by contractors.

    The portal gave KPC a way of tendering and communicating with contractors without relying on the Capt website.

    “The K-Tender portal was a step towards reducing reliance on Capt and gave KPC the flexibility to tender projects without Capt, even though, at the time, KPC made it clear that it intended to list all tenders both on the Capt website and its own portal.”

    The recent direct contract awards to Chinese contractors and the tendering process for the $3.3bn gas processing facility have sent a signal to contractors in the Kuwaiti market that more unusual tenders could be in the pipeline.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15791028/main.gif
    Wil Crisp
  • Kuwait awards oil pier contract

    27 February 2026

    Kuwait National Petroleum Company (KNPC) has awarded local firm Gulf Dredging & General Contracting Company a $172m contract to help develop a new south arm facility at the Shuaiba oil pier.

    The scope of the contract covers civil, marine, mechanical and electrical work, according to a statement.

    Gulf Dredging & General Contracting Company is a subsidiary of Kuwait-headquartered Heisco.

    The main contractor on the Shuaiba oil pier project is the Greek construction firm Archirodon. In October last year, KNPC awarded Archirodon a KD160m ($528m) contract to develop the new south arm facility.

    The Shuaiba oil pier comprises several structures, including the approach trestle, the north arm facility and the south arm facility. A number of planned projects are to be developed at the Shuaiba port facilities.

    The north arm facility consists of two berths, 31 and 32. When operational, it loads refined products for both KNPC and state-owned Petrochemicals Industries Company.

    The north arm facility is currently not operational and will be upgraded as part of a separate project.

    KNPC is a subsidiary of Kuwait Petroleum Corporation (KPC).

    Last year, KPC chief executive Sheikh Nawaf Al-Sabah reiterated that the company plans to increase its oil production capacity to 4 million barrels a day by 2035.

    About 90% of Kuwait’s oil production comes from Kuwait Oil Company, which also plans to achieve a daily gas production capacity of 1.5 trillion cubic feet by 2040.

    Kuwait is estimated to have 100 billion barrels of oil reserves.

    Under KPC’s 2040 strategy, it plans to invest $410bn, sourced from cash flow, debt and joint ventures with other businesses.

    Of the $410bn, KPC and its subsidiaries intend to invest $110bn to accomplish the group’s energy transition targets.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15791026/main.jpg
    Wil Crisp
  • Local firms win $378m Qatar project contracts

    27 February 2026

     

    Qatar’s Public Works Authority (Ashghal) has awarded construction contracts for two major projects in Doha to a pair of local contractors.

    According to the results of the tender published on Ashghal’s website, a joint venture of Imar Trading & Contracting and Al-Sraiya Trading & Contracting won a QR1.1bn ($323m) contract for the redevelopment of Hamad General Hospital.

    Qatar Building Engineering won the other QR198.5m ($55m) contract for the design and build of the new Q-Post headquarters building and sorting facility.

    The two projects are part of 12 newly signed contracts announced by Ashghal earlier in February.

    The other projects awarded include the renovation of the Qatar Racing & Equestrian Club and the Qatar Equestrian Federation, as well as the implementation of phase four of the Al-Uqda Equestrian complex development.

    In the roads and infrastructure sector, four projects have been awarded, led by packages one and two of the road and infrastructure development works in Izghawa and Al-Thumaid.

    The awards also include a project covering landscaping and an air-conditioned walkway at Qatar University, as part of broader public facilities improvement initiatives.

    Mohammed Bin Abdulaziz Al-Meer, president of Ashghal, said that the projects have been awarded to Qatari firms, reflecting Ashghal’s commitment to strengthening the role of local companies.

    According to UK analytics firm GlobalData, Qatar’s construction industry is expected to expand by 4.3% in 2026, supported by investments in renewable energy and transportation infrastructure.

    According to the Planning & Statistics Authority, Qatar’s construction value-add grew by 6.6% year-on-year in the first half of 2025. 

    GlobalData expects the industry to grow at an annual average growth rate of 4.6% in 2027-29, supported by investments in construction, energy and infrastructure projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15795459/main.jpg
    Yasir Iqbal