Riyadh Cement Company announced today a significant strategic step in its operational journey by signing a contract with the Chengdu Design Research Institute branch to convert its production lines to run on natural gas instead of liquid fuels. The company explained in an official statement published on the Saudi Stock Exchange (Tadawul) website that the total value of the contract is SAR 59.4 million, and its implementation period extends up to 12 months.
Contract details and strategic shift
This agreement is a turnkey project, whereby the implementing company will undertake all the engineering and construction work necessary to complete the transformation. This step is a pivotal part of the company's plan to enhance its operational efficiency, as the project is expected to directly contribute to improving operational reliability and increasing energy efficiency, which will positively impact production stability and reduce operating costs once the project becomes fully operational.
Context of the liquid fuel displacement program
This move by Riyadh Cement is not an isolated event, but rather part of the Kingdom of Saudi Arabia's comprehensive national initiative, the Liquid Fuels Replacement Program. This ambitious program, overseen by the Kingdom's energy and industry sector, aims to replace liquid fuels (such as crude oil and diesel) used in industrial facilities and power plants with natural gas and renewable energy sources. The strategic importance of this program lies in freeing up significant quantities of crude oil for export instead of burning it domestically, thereby boosting the Kingdom's economic returns.
Economic and environmental impact and Vision 2030
From an economic standpoint, the cement sector is considered an energy-intensive industry, and therefore, switching to natural gas will provide a competitive advantage for Riyadh Cement Company by reducing the energy bill and kiln maintenance, given that gas is a cleaner and more efficient fuel compared to liquid fuel.
From an environmental perspective, the project directly contributes to achieving the goals of Saudi Vision 2030 and the Green Saudi Arabia initiative, as the use of natural gas helps reduce carbon emissions and minimize the environmental impact of industrial operations. This approach reflects the commitment of major national companies to environmental sustainability standards and supports the efforts of the Ministry of Industry and Mineral Resources in building a sophisticated, sustainable, and environmentally friendly industrial sector.
