Saudi Arabia’s SPARK and China’s Dalipal Holdings sign a 25-year land lease for a $2.1 billion energy equipment manufacturing project, with $600 million planned for the first phase.
Saudi Arabia’s King Salman Energy Park (SPARK) and China-based Dalipal Holdings have signed a 25-year land lease agreement to establish an advanced energy equipment manufacturing facility in the Kingdom, with the overall investment expected to reach approximately $2.1 billion. The project aims to strengthen domestic manufacturing capabilities and localise strategic energy sector supply chains.
Under the agreement, Dalipal International for Industry Company, a wholly owned subsidiary of Dalipal Holdings, will develop a site spanning approximately 1.03 million square metres within SPARK. The facility will serve customers in Saudi Arabia, the wider Middle East and international markets. The first phase of the project is expected to involve an investment of around $600 million.
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The planned manufacturing base will produce seamless steel pipes for oil and gas wells, drill pipes and specialised pipes for hydrogen transportation. These products are used in conventional energy operations and emerging energy infrastructure, including hydrogen supply networks. The facility is expected to benefit from SPARK’s industrial infrastructure, utilities and logistics connectivity, as well as its proximity to major energy and manufacturing markets.
SPARK President and CEO Mishal Al-Zughaibi said the 25-year lease marked an important milestone in Dalipal’s investment plans. He highlighted the project’s potential to strengthen local production, develop high-value industrial capabilities and supply energy markets across the region.
Dalipal Holdings Chairman Meng Fanyong described Saudi Arabia as a strategically important market and a key part of the company’s international expansion plans. Establishing a manufacturing base in the Kingdom is expected to bring the company closer to customers, improve regional supply chain efficiency and provide a platform for long-term growth.
The agreement builds on a letter of intent signed by SPARK and Dalipal in November 2024 at the ADIPEC energy conference. The latest deal advances the project from planning towards long-term development and execution.
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The investment aligns with Saudi Arabia’s National Industrial Strategy and Vision 2030 objectives to expand industrial capacity, attract international investment and increase local production. The project is expected to support the Kingdom’s ambitions to become a regional hub for energy equipment manufacturing while strengthening economic cooperation between Saudi Arabia and China.