Saudi Arabia's PIF Establishes New Developer for Al Khafji Coastal Megaproject Near Kuwait Border

Saudi Arabia's Public Investment Fund has established a new company dedicated to developing a major coastal residential and tourism project in Al Khafji, an oil-producing city situated near the Kuwaiti border, as the kingdom continues to expand its infrastructure in the strategically vital region.

Al Khafji is located approximately 10km south of the border and 130km from Kuwait City, positioning it closer to the Kuwaiti capital than to Dammam, which lies about 300km to the south. The governorate has a population of about 84,000 people and serves as a key center of oil production within the Divided Neutral Zone, where hydrocarbon resources are managed jointly and shared equally by Saudi Arabia and Kuwait.

The offshore Khafji field is operated by Al Khafji Joint Operations, a collaborative venture between Aramco Gulf Operations and Kuwait Gulf Oil Company. The field, capable of producing approximately 300,000 barrels per day, was previously shut down in 2014 due to a dispute between the two nations before being successfully restarted in 2020.

According to an announcement made on Monday by the Public Investment Fund, the newly formed Gulf Coast Development Company will oversee the development of roughly 20 square kilometres along a 10km stretch of Arabian Gulf waterfront, though the total cost of the project has not been publicly disclosed.

Development plans for the site include more than 16,000 homes spread across eight residential neighbourhoods, hotels offering approximately 1,400 rooms, commercial and tourism amenities, schools, and local marinas. The construction process is scheduled to take place across three distinct phases, with the first phase—featuring three neighbourhoods that will form the core of the development—slated for completion by 2030.

Saad Alkroud, head of local real estate investments at the Public Investment Fund, stated that the newly created company will capitalize on the unique cultural and logistical advantages of Al Khafji, generate new economic opportunities for local residents, upgrade the municipal infrastructure, and strengthen private sector partnerships.

The Public Investment Fund explained that the coastal project aims to address the rising demand for housing and tourism accommodations in the northern Eastern Province, an area that consistently draws visitors from Kuwait and other parts of the Gulf region.

This new developer falls directly under the fund's urban development and livability ecosystem, which is designated as one of the six core systems outlined in the Public Investment Fund's 2026-2030 strategy approved by its board in April. The remaining five systems encompass tourism, travel and entertainment; advanced manufacturing and innovation; industrials and logistics; clean energy, water and renewables infrastructure; and Neom. Other prominent property developers operating under the Public Investment Fund include Roshn, Diriyah Company, New Murabba, and Jeddah Central Development Company.