THE Saudi Port Authority has signed a deal with Saudi Trade and Export Development Company (Tusdeer) to build and operate a container terminal at Jeddah Islamic Port (JIP) to handle 1.5 million TEU a year and the largest containerships in the world.

The SAR1.66 billion (US$443.14 million) project will expand JIP capacity 45 per cent and maintain Jeddah's lead as a regional hub, reported AME Info, a Mideast business news portal. The terminal, to be completed in three years, will also form part of a land bridge after the completion of the Saudi Railways link from the Red Sea to the Gulf.

Tusdeer chairman Mohammed Zainal Alireza said the terminal would be built on reclaimed land along the re-export zone in JIP and is expected to handle up to 2 million TEU annually. It will include a handling and storage area of 400,000 square metres. Dredging starts mid-2007, the report said.

Tusdeer has entered into a joint venture with the builder of Port of Tanjung Pelepas, Malaysia's Seaport Terminal, which holds a 20 per cent stake in the JV. The UK's Drewry Shipping has been commissioned to conduct a market survey and demand analysis on projected container traffic into Jeddah.

The facility will have post panamax quay cranes, berth depths of over 18 metres and a 16.5-metre navigation channel to accommodate 14,000-TEU containerships or larger.