ASMO, the procurement and logistics venture owned by DHL Supply Chain and Saudi Aramco, has started operations at Aramco's Central Pipe Yard near Abqaiq. The site covers more than five million square metres and holds the oil country tubular goods and line pipe that feed Aramco's drilling and construction programmes.
ASMO, the procurement and logistics joint venture owned by DHL Supply Chain and Saudi Aramco, has begun operating Aramco's Central Pipe Yard near Abqaiq in the Eastern Province. The site covers more than five million square metres, making it the largest facility in ASMO's network and, on the company's own description, one of the biggest logistics operations for pipe materials anywhere in the world.
The yard stores and distributes oil country tubular goods and line pipe for Aramco's upstream and downstream businesses and for its capital projects — the casing, tubing and large-diameter pipe that drilling programmes and pipeline construction consume in bulk. ASMO said the handover is intended to raise service levels, smooth the flow of material to sites, improve visibility over inventory and make delivery inside Aramco's supply chain more efficient.
What has happened here is a change of operator rather than a construction project. The Central Pipe Yard is an Aramco asset; ASMO now runs it. That distinction matters, because it puts the venture in charge of a category of stock that is expensive to hold and awkward to move. Pipe is stored in the open, handled by cranes and side-loaders rather than forklifts, and often sits for long periods against drilling schedules that shift by months. Getting the wrong string of casing to the wrong rig is not a warehousing error so much as a lost drilling week.
It is the third Aramco facility ASMO has absorbed, following storage sites in Riyadh and Jazan taken on earlier in the year. The venture has said it intends to operate six facilities in the Kingdom by 2030: the three Aramco sites it now manages, plus three purpose-built hubs still to be developed.
ASMO was launched in February 2024 by DHL Supply Chain and Aramco, with DHL holding 51 percent and Saudi Aramco Development Company the remaining 49 percent. Its remit is broader than warehousing: sourcing, procurement, inventory management, transport, storage and a business-to-business marketplace aimed at the energy, chemicals and industrial sectors. The venture has said it expects annual procurement volumes to run above $8 billion.
The commercial logic for Aramco is the ordinary one behind any materials outsourcing. Handling and storing heavy consumables is capital-hungry and labour-intensive, it does not distinguish one oil company from another, and a specialist operator with a global network can usually run it at lower unit cost. For DHL, the attraction is a long-dated volume base in a market where industrial demand is being built rather than fought over, and an operating position inside the supply chain of one of the world's largest energy companies.
The Abqaiq location is not incidental. The area sits at the centre of Aramco's Eastern Province processing and gathering system, close to the fields and plants that consume the material the yard holds. Concentrating pipe there shortens the last leg of a delivery that is typically the most difficult part of the journey.
Nothing in the announcement adds capacity to Aramco's production system, and no new investment figure was disclosed. What it does show is how far the venture has moved in under two years from a signed agreement to running physical infrastructure at scale — and how much of Aramco's materials handling is now sitting outside the company.