Energy and Infrastructure Mission to Saudi Arabia: Third City Stop Added to the Trade Mission Itinerary

AGENCY:

International Trade Administration, Department of Commerce.

ACTION:

Notice.

Mission Description

The United States Department of Commerce, International Trade Administration, U.S. and Foreign Commercial Service (CS) is organizing an energy and infrastructure trade mission to the Kingdom of Saudi Arabia, December 6-8, 2010. Led by a senior Department of Commerce official, the mission to Saudi Arabia is intended to include representatives from a variety of U.S. energy and infrastructure industry suppliers and service providers. The mission will introduce mission participants to end-users and prospective partners whose needs and capabilities are targeted to the respective U.S. participant's strengths. Participating in an official U.S. industry delegation, rather than traveling to Saudi Arabia independently, will enhance the companies' ability to secure meetings in Saudi Arabia, especially in light of discussions on this topic between the Government of Saudi Arabia and the U.S. Ambassador to Saudi Arabia. The mission will include appointments, briefings and receptions in Riyadh and Dhahran, Saudi Arabia's primary energy and infrastructure industry hubs. Trade mission participants will have the opportunity to interact with Commercial Service (CS) specialists covering the energy and infrastructure industries to discuss industry developments, opportunities, and sales strategies.

Commercial Setting

The Saudi Arabian energy and infrastructure sectors rank among the world's most dynamic. Government contracts worth approximately $140 billion have been awarded so far this year, of which around $110 billion were for non-oil projects. U.S. goods exports to Saudi Arabia in 2008 were $12.5 billion, up 20 percent from the previous year.

The Oil and Gas Sector

Being the largest producer and exporter of crude oil, Saudi Aramco, the national oil company, is augmenting capacity to maintain a surplus production of 1.5-2.0 million barrels per day. The company is also expanding its Master Gas System, building an NGL recovery plant, a new grass-roots gas plant, and enhancing capacity at an existing plant. While the global recession that began in 2008 has presented new economic challenges, Saudi Arabia is pushing forward with many of its development projects in the oil and gas sector. In March 2009, the Saudi Arabian Ministry of Petroleum and Mineral Resources announced plans to spend approximately $60 billion on upstream and downstream operations through 2014. The budget includes allocations for 144 projects, including 17 mega-projects (those valued at more than $1 billion), 30 large projects, 17 medium-sized projects, and 80 small schemes.

Petrochemicals

Industry sources believe that more than $70 billion in petrochemical projects are under development and Saudi Arabia Basic Industries Corporation has $48 billion projects planned for 2011-2020. The development of downstream, value added industry is a cornerstone of the government's efforts to diversify the economy away from oil and gas. The Saudi Government aims at consolidating the country's position as the leading bulk petrochemicals commodities producer of the 21st century: as such, a new wave of specialty petrochemical products is being developed, including polycarbonates, phenols, engineering plastics and thermoplastic olefins. Recent projects to produce specialty chemicals include the Saudi Kayan Petrochemical Company complex, which will produce the region's first polycarbonates and phenols; the mega Ras Tanura refinery upgrade and integrated petrochemicals complex, which will produce more than 300 different products, and the third-phase Saudi International Petrochemical Company (Sipchem) complex, which will produce synthetic fibers. The planned expansion at Jubail Industrial City II with around 20 petrochemical and infrastructure projects worth more than $21.6 billion dollars will also bring various opportunities for U.S. petrochemical and engineering companies, as well as to American U.S. manufacturers/suppliers of equipment, parts, supplies, and services related to the petrochemical industry.

Construction

At a time when some Middle Eastern countries are facing financial difficulties, Saudi Arabia's star is clearly rising. With tens of billions of dollars of projects awarded, the Saudi construction sector is rolling forward. Saudi Arabia's ambitious rail plans are fueling activity in the infrastructure sector, with $30 billion worth of contracts under way or at the bidding stage. Likewise, the Saudi real estate market is set to grow significantly over the next four years. Saudi Arabia has the largest real estate market in the Gulf Cooperation Council (GCC), with more commercial (office, retail and residential) floor space than all of the other GCC countries combined. This impressive growth is being driven by a combination of a large and growing economy and strong demographic fundamentals. Among Saudi Arabia's super-projects are as many as six “economic cities,” to be completed by the year 2020 at an initial cost of US$ 87.8 billion, as part of a public-private partnership strategy led by the Saudi Arabian General Investment Authority (SAGIA). The “cities” are expected to contribute $150 billion to GDP, and to collectively create over 1.5 million jobs by 2020, as well as living space for more than 2.5 million residents. Around $6 billion is being poured into Saudi Arabia's housing sector, to accommodate the population increase. Roughly $2 billion is being spent on schools and universities.

Billions more are going toward ultra-modern mega-commerce and tourism projects, and the country's strongly-competitive industrial sector. Hundreds of new factories are to be constructed. All of this fastpaced construction sector activity is creating a wealth of investment opportunity for American architecture, engineering, design and construction firms.

Saudi Arabia's transport sector—including road infrastructure, airports and seaports—is also part of an ambitious investor-friendly expansion plan. Not surprisingly, these forward-looking plans are fuelling strong demand for a broad variety of cutting-edge construction materials and products from leading international suppliers.

Aviation

The Kingdom of Saudi Arabia is the largest economy in the region. It is also the most populous country in the Gulf Cooperation Council (GCC) and, with its holy sites, is the focus of a vast market for pilgrimage and tourism that stretches across the entire Arab world. The country, however is lagging behind the booming regional aviation industry, and the infrastructure at the country's airports has become a source of concern to the Saudi authorities. Billions of dollars are now being invested in the Kingdom's main airports to improve the travel experience for the millions of pilgrims and tourists who enter the country each year.

Energy and Infrastructure Trade Mission to Saudi Arabia offers an optional one-day stop in Jeddah for companies in the aviation sector, planned for December 5, 2010. For companies also traveling to Riyadh and Dhahran on December 6-8, additional cost for the optional aviation stop in Jeddah is $1,000 in addition to the trade mission fee. For companies wishing to travel to Jeddah only the cost is $2,000.

Mission Goals

The short term goals of the energy and infrastructure trade mission to Saudi Arabia are to (1) introduce U.S. companies to potential joint-venture partners and other industry representatives, and (2) introduce U.S. companies to industry and government officials in Saudi Arabia to learn about various program opportunities in those industries.

Mission Scenario

In Riyadh, the U.S. mission members will be presented with a briefing by the U.S. Embassy's Counselor for Commercial Affairs, the Senior Commercial Specialist for the energy and infrastructure sectors and other key U.S. Government and corporate officials. Participants will also take part in business matchmaking appointments with Saudi private-sector organizations. In addition, they will attend a networking event with multipliers. In Dhahran, participants will receive a market briefing by the Senior Commercial Specialist for the energy and infrastructure sectors at the U.S. Consulate, and they will participate in one-on-one business matchmaking appointments, and networking activities. Energy participants will also receive a briefing on market opportunities by Saudi Aramco, the world's largest oil corporation.

Matchmaking efforts will involve multipliers such as Council of Saudi Chambers. U.S. participants will be counseled before and after the mission by domestic mission coordinator. Participation in the mission will include the following:

• Pre-travel briefings/webinar on subjects ranging from business practices in Saudi Arabia to security;
• Pre-scheduled meetings with potential partners, distributors, end users, or local industry contacts in Riyadh and Dhahran;
• Transportation to airports in Riyadh and Dhahran;
• Meetings with Saudi Government officials;
• Participation in industry receptions in Riyadh and Dhahran;
• Meetings with CS Saudi Arabia's energy and infrastructure industry specialists in Riyadh and Dhahran; and
• Networking receptions in two cities of the trade mission.

Proposed Mission Timetable

Mission participants will be encouraged to arrive December 5, 2010 and the mission program will proceed from December 6 through December 8, 2010.

Participation Requirements

All parties interested in participating in the Energy and Infrastructure Trade Mission to Saudi Arabia must complete and submit an application for consideration by the Department of Commerce. All applicants will be evaluated on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. A minimum of 10 and a maximum of 15 companies will be selected to participate in the mission from the applicant pool. U.S. companies already doing business in Saudi Arabia as well as U.S. companies seeking to enter the market for the first time are encouraged to apply.

Fees and Expenses

After a company has been selected to participate on the mission, a payment to the Department of Commerce in the form of a participation fee is required. The participation fee will be $3,680 for large firms and $2,925 for a small or medium-sized enterprise (SME) or small organization, which will cover one representative. The fee for each additional firm representative (large firm or SME) is $500. Expenses for travel, lodging, most meals, and incidentals will be the responsibility of each mission participant.

Energy and Infrastructure Trade Mission to Saudi Arabia offers an optional one-day stop in Jeddah for companies in the aviation sector, planned for December 5, 2010. For companies also traveling to Riyadh and Dhahran on December 6-8, additional cost for the optional aviation stop in Jeddah is $1,000 in addition to the trade mission fee. For companies wishing to travel to Jeddah only the cost is $2,000.

Conditions for Participation

• An applicant must submit a completed and signed mission application and supplemental application materials, including adequate information on the company's products and/or services, primary market objectives, and goals for participation. If the U.S. Department of Commerce receives an incomplete application, the Department may reject the application, request additional information, or take the lack of information into account when evaluating the applications.
• Each applicant must also certify that the products and services it seeks to export through the mission are either produced in the United States, or, if not, marketed under the name of a U.S. firm and have at least fifty-one percent U.S. content.

Selection Criteria for Participation

Selection will be based on the following criteria:

• Suitability of a company's products or services to the mission's goals
• Applicant's potential for business in Saudi Arabia, including likelihood of exports resulting from the trade mission
• Consistency of the applicant's goals and objectives with the stated scope of the trade mission (as an example—be in the energy and/or infrastructure sectors indicated in the mission description)

Referrals from political organizations and any documents containing references to partisan political activities (including political contributions) will be removed from an applicant's submission and not considered during the selection process.

Timeframe for Recruitment and Applications

Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Commerce Department trade mission calendar ( http://www.ita.doc.gov/ doctm/tmcal.html ) and other Internet Web sites, press releases to general and trade media, direct mail, notices by industry trade associations and other multiplier groups, and publicity at industry meetings, symposia, conferences, and trade shows.

Recruitment for the mission will begin immediately and conclude no later than September 15, 2010. The U.S. Department of Commerce will review all applications immediately after the deadline. We will inform applicants of selection decisions as soon as possible after September 15, 2010. Applications received after that date will be considered only if space and scheduling constraints permit.

Contacts

U.S. Commercial Service Domestic Contact: Sean Timmins, 202-482-1841, Sean.Timmins@trade.gov.

U.S. Commercial Service Saudi Arabia Contacts: Mr. Habeeb Saeed, U.S. Commercial Service Riyadh, Tel: 966-1-488-3800, Habeeb.Saeed@mail.doc.gov.

Mr. Ishtiaq Hussain, U.S. Commercial Service Dhahran, Tel: 966-3-330-3200, Ishtiaq.Hussain@mail.doc.gov.