JPS Establishes Submarine XLPE Cable Plant in Saudi Arabia

J-Power Systems (JPS), a fifty-fifty joint venture by Sumitomo Electric Industries and Hitachi Cable to manufacture high-voltage power cables, announced on Monday the firm agreed with Marubeni Metals, Japanese nonferrous metal products trader, to establish a joint venture to produce submarine power cable in Saudi Arabia. The JV company will supply 5-35 kilovolt submarine XLPE cables for offshore oil and gas fields in Middle East and Africa. The plant will start production in January 2011.

The JV company will be established in July 2009, 75% owned by JPS and 25% by Marubeni Metals. The capital is 62.5 million riyals (approximately 1.5 billion yen). Capital expenditure for the plant construction is approximately 3 billion yen. The plant site will be offered by Saudi Arabian Oil Company (Saudi Aramco), a national oil company of Saudi Arabia. The annual revenue of the JV company is estimated at 2.5 billion yen for 2011.

The JV company will supply submarine XLPE cables to Saudi Aramco, Al-Khafji Joint Operation, jointly operated by Kuwaiti and Saudi Arabian governments, and other offshore oil and gas field development companies in Middle East and Africa. Saudi Aramco offered JPS to establish a submarine XLPE cable plant in Saudi Arabia for stable supply and maintenance of cable lines.

This JV company will become the second offshore cable plant for JPS and the first submarine XLPE cable plant in the region.