Dubai Ports World, the world's fourth-largest container port operator, and Emaar EC have signed a memorandum of understanding to build and operate a new sea port at King Abdullah Economic City (KAEC) in Saudi Arabia, north of Jeddah.

The port, which will be the first in the kingdom to be financed completely by the private sector, will have a capacity of 20mn TEUs per year by the third quarter of 2011, making it the biggest on the Red Sea as well as one of the world's 10 largest ports.

Mohamed Ali Alabbar, Emaar EC chairman, told local reporters that: "With its strategic location on the Red Sea, the KAEC seaport will create a regional logistics hub that will further stimulate the Saudi economy through new job and investment opportunities.

"The port is stationed on one of the largest and busiest shipping routes in the world and will offer an integrated transportation system to deliver cargo seamlessly to various destinations within the region and internationally."

The port's multipurpose cargo terminal will be operational by the end of 2010 and is expected to create more than 15,000 direct and indirect jobs and contribute an estimated SAR10 billion [US$2.67bn] annually to Saudi GDP.

DP World, which has a portfolio of 43 terminals and 13 new developments across 28 countries, saw its after-tax profit rise 52% to US$419.7mn in the last fiscal year. According to chief financial officer Yuvraj Narayan, the firm is looking into about twenty new properties and has allocated US$4.1bn for capital expenditure between 2007 and 2010.