Saudi's 'regional logistics hub' ambitions spark $1.5bn joint deal

The $1.5 billion joint fund is expected to secure 15 Very Large Crude Carriers (VLCCs) in three phases for the state-owned shipping firm.

The 10-year-long deal signed in the kingdom’s capital on Sunday night sees an 85 percent contribution from APICORP, the development bank of the 10 Arab petroleum exporting countries.

In stark comparison, the National Shipping Company of Saudi Arabia will make up the remaining 15 percent.

Saudi Energy Minister Khaled al-Faleh maintained the fund will contribute largely to turning the kingdom into a regional logistics hub, however debunked claims that the deal suggests plans to increase the kingdom’s oil production capacity.

The kingdom pumps 10.2 million bpd and is the world's top crude exporter.

The national firm – established in 1978 – currently owns 83 various vessels including 36 VLCCs.

Last month, Saudi Arabia unveiled its highly-anticipated new economic vision for the country, which the country's leadership say will break Riyadh's oil addiction.

The National Transformation Plan – part of Vision 2030 – was made public early on Monday, when the kingdom's cabinet approved the strategy as continued low oil prices hammer Riyadh's finances.

The ambitious initiative aims to more than triple non-oil revenues by 2020 to 530 billion Saudi riyals ($141.33 billion).

The National Transformation Plan was drafted by the state's Council for Economic and Development Affairs, which is headed by Saudi Deputy Crown Prince Mohammad Bin Salman. 

The ambitious Saudi prince is viewed as the architect of Saudi Arabia's new economic vision.

The five-year plan is part of the kingdom's more long-term agenda revealed the prince in April, dubbed 'Saudi Vision 2030'.