The National Shipping Company of Saudi Arabia (Bahri) has signed a memorandum of understanding with Saudi Aramco and Singapore's Sembcorp Marine to conduct a feasibility study for a maritime yard project in the kingdom.

A decision on whether to go ahead with the development, which will provide engineering, manufacturing and repair services to rigs platforms, commercial vessels and offshore service vessels, will be made in the next 15 months, Bahri's statement to the Saudi stock exchange said on Tuesday.

No value or location in the kingdom was given in the statement, except to say the yard would be a "world class" facility. The study comes after preliminary assessments for the project completed by Aramco and Sembcorp Marine.

Bahri, which is 28 percent owned by the state-owned Public Investment Fund, agreed a $1.3 billion merger with Vela International Marine in October. The tie-up made it the world's fourth largest owner of very large crude carriers, or VLCCs.

The firm bought Vela, previously owned by Aramco, for $832.75 million in cash and 78.75 million in new Bahri shares at a price of 22.25 riyals ($5.93) each.

Shares in Bahri were down 1.5 percent at 22.95 riyals at 0830 GMT against a slightly lower bourse, having risen 15.1 percent in the previous four sessions.

Singapore-listed Sembcorp Marine ended Tuesday down 1.8 percent. – Reuters