Latest News

• 
  Traffic drives construction underground

  Administrator

  3 April 2025

  

   

  On 14 February, Dubai construction was thrust again onto the global stage when Elon Musk, the world’s richest man, announced plans to explore the development of an underground Dubai Loop transportation system, along the lines of the Las Vegas Convention Centre Loop project in the US.

  Dubai has typically made headlines globally by constructing the world’s tallest towers. As the city becomes increasingly congested on the surface, it is taking some of its largest construction projects underground.

  With Musk’s backing, the Dubai Loop scheme is the most high-profile tunnelling project launched to date. It involves carving a futuristic transport system underneath Dubai. The initial phase of the project is currently being studied by Dubai’s Roads & Transport Authority (RTA) in partnership with The Boring Company, which is owned by Musk. It will cover 17 kilometres (km) and have 11 stations, with the capacity to transport over 20,000 passengers an hour.

  The project highlights the importance of expanding underground infrastructure in the Middle East region. This is mostly necessitated by the pressure that rapidly growing cities have put on existing transport and utility networks, particularly in major urban centres such as Dubai, Riyadh and Doha.

  Underground opportunities

  Projects that involve tunnelling, such as metro rail systems, underground highways and pedestrian walkways, are deemed key enablers in reducing congestion and optimising land use.

  The recently completed metro systems in Riyadh and Doha are examples of how underground rail networks can facilitate efficient urban mobility, and more such schemes are planned. 

  Without these subterranean projects, cities risk being stuck in a permanent state of gridlock, with longer commute times and decreased productivity. At the same time, tunnelling allows urban planners to integrate sustainable transport solutions, as well as large-scale utilities networks, without disturbing existing cityscapes, thereby enhancing connectivity and economic growth.

  These developments signal a major shift in engineering priorities, with regional governments investing in underground transport, sewerage and metro extensions to accommodate their growing populations and infrastructure needs.

  While the tower crane-dotted skylines of urban centres in the GCC attract attention, delivering major projects underground is an equally impressive engineering feat. Tunnelling under busy cities requires advanced excavation techniques, careful planning and coordination to avoid disruptions.

  More tunnelling work is expected as Dubai takes another significant step forward in tackling its ongoing traffic problems [with] a new metro link

  UAE tunnelling projects

  Tunnelling work forms a significant portion of the Dubai Metro Blue Line extension. Awarded in December for AED20.5bn ($5.5bn), the project includes 15.5km of underground track and five subterranean stations. When operational in 2029, the Blue Line will significantly expand Dubai’s metro capacity, linking major residential and commercial hubs.

  More tunnelling work is expected as Dubai takes another significant step forward in tackling its ongoing traffic problems by starting the procurement process for its next metro link: the Gold Line.

  Although the technical details of the project have yet to be revealed, it is expected that tunnels will form a major component of the scheme given that the new line will run through busy urban areas where there is little space to build overground. 

  The Gold Line will start at Al-Ghubaiba in Bur Dubai. It will run parallel to – and alleviate pressure on – the existing Red Line, before heading inland to Business Bay, Meydan, Global Village and residential developments in Dubailand.

  As a first step, the RTA has sent a request for proposals to companies for the lead consultancy role on the multibillion-dollar project.

  The UAE’s Etihad Rail also began a study of the tunnels required for the high-speed railway line connecting Abu Dhabi and Dubai in January. The survey works are ongoing on the Jaddaf and Dusup tunnels that will serve the high-speed rail link. Initial plans for the project include tunnelling works totalling 31km.

  Another major tunnelling project in the UAE is the $22bn Dubai Strategic Sewerage Tunnels scheme. The client, Dubai Municipality, is preparing to tender its first packages, which include deep tunnels that will stretch 42km in Jebel Ali and 16km in Warsan.

  The project will be delivered under a public-private partnership model, with international consortiums competing for contracts. Once completed, these tunnels will replace the traditional wastewater network, reducing energy consumption and enhancing long-term sustainability.

  Saudi schemes

  In Saudi Arabia, Riyadh is preparing to expand its metro network with the addition of a Line 7 and an extension to the existing Line 2.

  The total length of Line 7 will be about 65km, of which 47km will be underground. The line will have 19 stations, 14 of which will be underground.

  The project involves constructing a metro line linking the Qiddiya entertainment city development, King Abdullah International Gardens, King Salman Park, Misk City and Diriyah Gate. 

  In March, the Royal Commission for Riyadh City (RCRC) gave consortiums until 15 June to submit their bids for a design-and-build contract for the construction of Line 7.

  The planned Line 2 extension is 8.4km long, of which 7.1km is underground, and three out of its five stations will be built underground. The RCRC is expected to award the construction contract this year.

  In January, the kingdom also completed the phased roll-out of the Riyadh Metro network. The current network comprises six lines spanning about 176km, of which 74km is constructed underground.

  These numbers indicate that over 42% of the overall network is underground, highlighting the growing importance of tunnels in the kingdom’s plans to improve infrastructure in its most densely populated cities.

  Tunnelling works are also a key component of the plans to improve the stormwater drainage system in Jeddah, where the municipality is preparing for the construction of the King Abdullah Road-Falasteen Road tunnel.

  The three-year scheme involves constructing 5.3km of tunnels with an internal diameter of 7.2 metres using tunnel boring machines (TBMs) and another 3.4km of tunnels with a diameter of 3.5 metres driven by pipe jacking or TBMs.

  At the kingdom’s Neom gigaproject, city planners are looking to find solutions to many of the problems faced in existing cities and, as a result, tunnels and large-scale underground utilities corridors are being built at the beginning of the project. For example, the development’s Delta Junction tunnels will serve as a railway junction connecting the Spine infrastructure corridor with the Neom Connector rail link to the Oxagon industrial zone. 

  The project involves 26.5km of tunnelling work that will be split into a north and a south lot. The construction works are expected to begin this year as the client is evaluating the revised proposals submitted by firms in November last year.

  Kuwait Metro will feature extensive tunnelling … ensuring minimal disruption to existing roads while integrating with future transport networks

  Further tunnel projects

  Beyond the Gulf, Egypt has a long history of tunnelling projects, as it has had to deal with crippling congestion and urban overcrowding for decades. In the 1980s, work was completed on two major projects that involved tunnelling: the first phase of the Cairo Metro system and the Greater Cairo wastewater project, which involved the construction of sewage tunnels on the east and west banks of the Nile. 

  Today, Cairo’s tunnelling projects include the Cairo Metro Line 4 project. Spanning 42km with 39 stations, it involves over 20km of tunnels.

  Meanwhile, in Morocco, national railway operator L’Office National des Chemins de Fer (ONCF) is constructing a tunnel project in Rabat.

  In February, ONCF announced a 3.3km tunnel to be constructed under the Bou Regreg river at an estimated cost of MD1.4bn ($140m). The tunnel will connect the Sale and Agdal stations in an effort to alleviate traffic.

  Similarly, the long-awaited Kuwait Metro will feature extensive tunnelling to navigate the dense urban fabric of Kuwait City, ensuring minimal disruption to existing roads while integrating with future transport networks. 

  Qatar’s expansion of Doha Metro, meanwhile, requires additional underground infrastructure to connect developing areas and support the country’s vision for a comprehensive public transport system. 

  Mecca Metro, already serving millions of pilgrims, is also set for further expansion, likely involving significant tunnelling to facilitate smoother access to holy sites while overcoming geographic constraints. 

  In Oman, the Muscat Metro project is likewise expected to link key districts while preserving the city’s landscape and avoiding disruptions to arterial roads by introducing underground sections. 

  All of these projects show that tunnels will play an important role in the region’s future as it strives to create cities with more efficient and environmentally sustainable transit and utilities systems. 

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  Yasir Iqbal
• 
  Saudi Arabia’s non-oil economy forges onward

  Administrator

  3 April 2025

  

   

  The kingdom’s recent news flow provides a range of indicators offering ammunition for those with both glass half-full and glass half-empty views on the country’s economic prospects.

  Saudi decision makers can point to some positive signals that suggest the tapering of oil prices is not putting a major dent into the country’s economic outlook, with the robust non-oil performance giving some comfort to policymakers in Riyadh.

  The Saudi Purchasing Managers’ Index recorded its highest level in over a decade in January, as non-oil business conditions improved amid increases in new orders and higher sales volumes.

  GDP growth has been solid, despite weaker oil production and prices. According to Al-Rajhi Capital, Saudi Arabia’s real GDP grew by 4.4% year-on-year in Q4 2024 – the highest growth rate in two years – lifted by a 4.6% rise in non-oil GDP, as compared to a 3.4% increase in oil sector GDP.

  Consumer sentiment is robust, with spending growing by 11% in year-on-year terms in January, according to Riyadh-based Jadwa Investment.

  Balancing the budget

  Public finances are the biggest casualty of the deterioration in oil export earnings.

  Saudi Aramco’s decision in early March to cut its annual dividend payout will come as a blow to the country’s public finances, as the company confirmed that its payouts will drop by $39bn in 2025 – a 31% decline in year-on-year terms.

  According to consultancy Capital Economics, a performance-linked dividend of just $200m will be paid out this quarter, far lower than the $10.8bn distributed in each quarter of 2024, and which, over the year, was equivalent to more than 10% of state revenues.

  The worsening finances follow a period when the government was in a stronger position to lean on Aramco’s higher earnings – in 2021-22, when oil prices were soaring. That windfall now appears to have been exhausted, with follow-through for this year’s performance.

  With Brent crude averaging around $70 a barrel this year, and potentially slipping to $60 a barrel by the end of 2026, Capital Economics anticipates government revenues being about 4% of GDP lower this year compared to 2024. This implies that the budget deficit will be higher than the 2.3% of GDP forecast in the 2025 budget.

  “Going towards a deficit in a range of 5%-6% of GDP will start to raise the alarm bells for the government,” says James Swanston, a senior economist focused on the Middle East and North Africa region at Capital Economics.

  “That’s not to say they can’t easily finance that. They’ve got very large assets and they have tapped the international capital markets over the last few years, so if they wanted to issue more debt near-term, that’s not a concern.”

  However, more cuts to Aramco’s dividends this year will only add to the pressure on the government to raise borrowing. And relying on borrowing to fill the fiscal gap will contribute to a worsening of the kingdom’s debt-to-GDP ratio, which could rise from 29.6% to over 70% by the end of the decade, according to Capital Economics.

  This leaves a mixed economic picture for the kingdom, with oil weakness set against still-resilient non-oil confidence, though the former is also little cause for alarm, according to analysts.

  “The budget wasn’t assuming that Saudi Aramco’s performance-linked dividends would still be as big as they were in the second half of 2023 and in 2024. It’s not a shock to the budget plan, and that explains why the revenue projections show a decline in revenue in 2025,” says Toby Iles, chief economist at Jadwa Investment.

  “Of course, if you’ve got 3% of GDP less in revenue than in 2024, then that does tighten the budgetary situation year on year. At Jadwa, we’ve forecast a deficit of close to SR130bn ($34.7bn), which is around 3% of GDP. But the government does have fiscal space to go wider than that, if it decides to.”

  The other option for the government is to continue to issue debt and make larger cuts to its capital expenditure than those already outlined in the budget. “The authorities will probably be reluctant to cut current expenditure or the public sector, so capital projects may be where the cuts will be,” says Swanston.

  There may also be more impetus to raise revenues. Although Saudi Arabia has not set out firm plans, a real estate tax could emerge as one measure that could swell depleting state coffers.

  Market sentiment holds

  In the meantime, robust bank credit approaching 15% in year-on-year terms, along with a surge in consumer spending, shows that in domestic terms, economic sentiment is still strong.

  Structural elements of the budget have also been improving. “Non-oil revenue, for example, now covers 85% of wage spending, whereas in 2016 it covered less than half. That’s almost approaching parity, which is pretty positive,” says Iles.

  Jadwa expects real GDP growth of 3.7% in 2025, led by another strong performance by the non-oil sector, the economy’s main growth engine.

  This links to a broader question of whether Saudi Arabia’s non-oil growth reflects impetus from the country’s private sector, unaffected by any cyclical retrenchment, or whether the impact of the economic transformation is starting to be felt.

   “When you look at the performance of the non-oil sector, you see pretty strong growth across a range of sectors. It’s quite broad based, and links back to the strong consumption trends and the strong investment. And both of those things are, to an extent, linked to Vision 2030 reforms,” says Iles.

  If the non-oil vibrance can survive global headwinds, including weaker oil prices, then the government’s insistence on the importance of holding to its ambitious economic transformation agenda may be vindicated sooner than 2030.

  ---

  MEED’s April 2025 report on Saudi Arabia also includes:

  > GOVERNMENT: Riyadh takes the diplomatic initiative
  > BANKING: Saudi banks work to keep pace with credit expansion
  > UPSTREAM: Saudi oil and gas spending to surpass 2024 level
  > DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
  > POWER: Saudi power sector enters busiest year
  > WATER: Saudi water contracts set another annual record
  > CONSTRUCTION: Reprioritisation underpins Saudi construction
  > TRANSPORT: Riyadh pushes ahead with infrastructure development

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  James Gavin
• 
  Securing Bahrain’s hydrocarbons potential

  Administrator

  3 April 2025

  

   

  Bahrain, which has access to modest hydrocarbons reserves in comparison to its Gulf peers, has been in constant pursuit of additional resources to grow its oil and gas production levels.

  The country took a leap towards this goal in 2018, when it announced the discovery of the Khalij Al-Bahrain offshore hydrocarbons basin, which is estimated to contain 80 billion barrels of oil and 10-20 trillion cubic feet of gas. Almost seven years on, however, Manama is not known to have made any notable progress on the commercial appraisal of that oil and gas resource base.

  State enterprise Bapco Energies has, therefore, devised a multi-pronged strategy to secure Bahrain’s energy future. The first objective is to maintain the country’s present oil and gas output levels, according to group CEO Mark Thomas.

  “Objective number one is to stabilise oil and gas production from the existing reservoirs at the Awali field and stem the decline. These are very mature reservoirs, which, without intervention, will decline quite quickly,” Thomas tells MEED.

  Bahrain’s primary oil and gas production comes from the Awali field, where the first oil in the Gulf region was discovered in 1932. Bapco Upstream, a subsidiary of Bapco Energies, is the sole operator of the onshore field. It produces an average of 42,400 barrels a day (b/d) of crude oil and 1.67 billion cubic feet a day of non-associated gas from the Awali field, which is also known as the Bahrain field.

  In addition, Bapco Energies draws in about half of the 300,000 b/d production capacity of the Abu Safah offshore field, which is shared by Bahrain and Saudi Arabia.

  “Objective number two is to develop new opportunities for us,” Thomas says, adding: “We’ve been looking at appraising pre-Unayzah gas from the Al-Jawf and Al-Juba reservoirs,” which Bapco Energies announced discovering in 2022.

  “These are deep gas reservoirs, so we call them unconventional. They’re tight rock, need to be fracked and require the drilling of horizontal wells for production. We’ve gone through an appraisal programme on that. We’ll start a development programme in 2025 around those [discoveries].”

  Exploration campaign

  Bapco Energies is progressing with a “very big three-dimensional (3D) seismic programme” to hunt for offshore hydrocarbons resources, Thomas says. 

  “We’re running an extensive campaign covering about 4,500 square kilometres of surface area, where we will be shooting 3D seismic. That is basically around the entirety of [Bahrain]. We will carry on through 2025 and into 2026.

  “We hope to be able to identify some structures and then invite companies to come, share the information with them and hopefully do some exploration drilling,” he adds. 

  “It’s logical that there will be [a licensing round in the future], assuming that we are successful with the 3D seismic and can identify some structures. But it needs to wait until we have some quality data. 

  “This has always been the hindrance for us in attracting international oil companies to come to Bahrain,” he notes. 

  “The quality of the data that we had for offshore was not good and, quite frankly, for a company entering a new country, the risk was too high.”

  Italian energy producer Eni is the only international player that has been evaluating exploration and production opportunities in Bahrain in recent years.

  “By using the latest technology with 3D seismic seabed nodes, and by shooting deeper, we will absolutely have the best data that we can. And, if there are structures offshore, we will definitely find them,” Thomas says.

  By using the latest technology with 3D seismic seabed nodes … we will absolutely have the best data

  Business expansion

  Bapco Energies has set its sights on growing its presence in overseas markets by identifying and exploiting promising opportunities in the upstream sector, similar to the path that has been adopted by some of the other Gulf national oil companies in this decade. 

  “We have traditionally been a national oil and gas company, and what we’re looking at now is international expansion,” Thomas says. 

  “We’ve got 90 years of experience in exploring for, and developing, oil and gas fields. We want to take that capability, that experience, and apply it internationally.”

  He continues: “We’ve taken that proposal through our governance structure and received approval for that.
  So now, we’re looking at potential opportunities where we could invest outside of Bahrain, using our capability and experience.

  “We are not necessarily [looking at] being an operator, and certainly not [aiming to be] in exploration plays, but more into already-producing fields, or fields in a late stage of development, where the risk is low. These are the types of opportunities that we’re now looking at. They are small in nature, but they’re out there and so we’re searching for them right now.”

  Bapco Energies took a stride towards its goal of international expansion in July, with the launch of its venture capital arm, BeVentures.

  “BeVentures is a new company for us. It’s something that a lot of the major energy companies are doing, and that is to set up a separate company to look at opportunities for investment in new services and new technologies that can both help their existing business, as well as prepare their businesses for the future, for the energy transition,” Thomas says. 

  “We are looking at smaller, direct investments in companies that have a commercial product. What they’re looking for is capital and [ways to] scale [up].

  “We’re looking at opportunities principally within our existing businesses around oil and gas production, refining and petrochemicals. But we’re also looking at elements that will prepare us for the future, more into renewables.” 

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  Indrajit Sen
• 
  Adnoc-Covestro deal decision due in May

  Administrator

  2 April 2025

  EU antitrust regulators are expected to decide by 12 May whether to clear or extend the review of Abu Dhabi National Oil Company's (Adnoc) €15.9bn ($17.1bn) takeover of German chemicals producer Covestro.

  The 27-country EU competition enforcer can either clear the deal with or without conditions, or open a four-month investigation after its preliminary review, a Reuters report said, citing a filing on the European Commission's website.

  It was reported in October last year that Adnoc International, the overseas business arm of Adnoc Group, had signed an investment agreement Covestro in which it made a takeover offer of €14.7bn.

  Adnoc International said at the time that it will launch a voluntary public takeover of €62 ($69) a share, which implies an equity value for Covestro of about €11.7bn and represents a premium of about 54% to Covestro’s closing price on 19 June, the day before the first media coverage regarding a potential transaction.

  Leverkusen-headquartered Covestro’s supervisory and management boards supported the takeover offer.

  In addition, Adnoc International will subscribe to a 10% non-preemptive capital increase of €1.17bn in Covestro at the closing of the transaction.

  The offer will be subject to a minimum acceptance level of 50% plus one share and customary closing conditions, including merger control, foreign investment control and EU foreign subsidies clearances, the companies said.

  The agreement between Adnoc International and Covestro, which runs until the end of 2028, contains several obligations on the part of the Abu Dhabi energy producer, including maintaining Covestro’s existing business activities, corporate governance and organisational business structure.

  Adnoc approached Covestro about a potential takeover in September 2023, but initial advances were rejected, leading the Abu Dhabi state enterprise to raise the value of its offer.

  Adnoc’s initial approaches included a takeover price of €55 and then €57 a share, Bloomberg News reported at the time.

  Covestro’s expertise lies in chemicals recycling, which is key for the future of the energy industry and a target area for Adnoc.

  Russia's invasion of Ukraine in 2022 slashed deliveries of natural gas to Germany, resulting in a crisis that gripped the German chemicals industry, which accounts for about 5% of the country’s GDP.

  Precedent

  In September, the European Commission approved the takeover of the telecommunications assets of Czech investment group PPF by UAE telecoms group e&.

  Sovereign wealth fund Emirates Investment Authority holds a 60% stake in e&. The commission's review concluded that the “subsidies received by e& did not lead to actual or potential negative effects on competition in the acquisition process”.

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  Jennifer Aguinaldo
• 
  Edgnex acquires Nordic data centre developer

  Administrator

  2 April 2025

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  Edgnex, a subsidiary of Dubai-based property developer Damac, has acquired Helsinki-headquartered data centre-focused real estate developer Hyperco as part of its European expansion strategy.

  Damac announced the acquisition on 31 March.

  Hyperco operates data centres in Finland and Sweden, "leveraging the region’s renewable energy sources, mature digital ecosystem and high connectivity", local media reports said.

  Hyperco's three co-founders and existing team will continue to lead operations through the next phase of growth, according to a statement by the company.

  Hussain Sajwani, founder of Damac Group, said his firm plans to "build a significant future capacity in the Nordics and establish a strong foothold in the market".

  Edgnex’s recent European activities include a €150m ($161.9m) joint venture in Greece with Public Power Corporation to develop a 12.5MW facility, expandable to 25MW, and a €400m commitment to build a 40MW data centre in Madrid, Spain.

  In January, Sajwani pledged $20bn to develop data centres in the US.

  Sajwani and then US President-Elect Donald Trump announced the plan on 7 January in Florida, a day after the US Congress certified Trump as the winner of the 2024 presidential election.

  The project’s initial phase covers establishing data centres in Texas, Arizona, Oklahoma, Louisiana, Ohio, Illinois, Michigan and Indiana.

  It was previously reported that the Dubai-based property developer plans to develop $1bn-worth of data centres in countries in Europe, Asia, Africa, the Middle East and the Commonwealth of Independent States.

  Edgnex is constructing two data centre facilities in Dammam and Riyadh in Saudi Arabia that will deliver 55MW in 2025. There are also plans for a data centre in Amman, Jordan, and another in Turkiye in partnership with Vodafone.

  In May, Damac announced its entry into the Indonesian market with plans to build a 15MW data centre in Jakarta. The first construction phase for the facility is scheduled to be completed in the fourth quarter of 2025.

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  Jennifer Aguinaldo
• 
  Developers prepare Saudi round six solar IPP bids

  Administrator

  2 April 2025

  

   

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  Prequalified developers are forming teams to bid for the contracts to develop solar farms under the sixth round of Saudi Arabia's National Renewable Energy Programme (NREP).

  MEED understands that bids are due for the four solar photovoltaic (PV) independent power projects (IPPs) by 1 June.

  The four solar IPPs have a combined capacity of 3,000MW.

  A 1,400MW solar PV IPP will be located in Najran, while the smallest – the 400MW Al-Sufun solar IPP – will be in Hail.

  The 600MW Samtah and 600MW Al-Darb solar IPPs will be located in Jizan, a region that has been placed under security-related travel alerts by some countries and international firms.

  Most of the prequalified bidders participated in site visits, which Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), conducted in late January.

  SPPC prequalified 16 companies that can bid as managing and technical members for the solar PV contracts. These are:

  • Abu Dhabi Future Energy Company (Masdar, UAE) 
  • Alfanar Company (local)
  • EDF Renewables (France)
  • Kahrabel (Engie, France)
  • FAS Energy (local)
  • Jinko Power (Hong Kong)
  • Korea Electric Power Corporation (Kepco, South Korea)
  • Marubeni Corporation (Japan)
  • Nesma Renewable Energy (local)
  • SPIC Hunaghe Hydropower Development (China)
  • Sumitomo Corporation (Japan)
  • TotalEnergies Renewables (France)
  • AlJomaih Energy & Water (local)
  • Sembcorp Utilities (Singapore)
  • AlGihaz Holding Company (local)
  • Korea Western Power Company (Kowepo, South Korea)

  The following five companies have been prequalified to bid as managing partners:

  • Jera Nex (Japan)
  • Power Construction Corporation of China (PowerChina)
  • China Power Engineering Consulting Group International Engineering (China)
  • Posco International (South Korea)
  • Saudi Electricity Company (SEC, local)

  Round six of the NREP will have a total combined capacity of 4,500MW, including the 1,500MW Dawadmi wind farm, for which a separate set of bidders has been prequalified.

  SPPC issued the prequalification request for round six of the NREP in September last year and received statements of qualifications from interested developers and developer consortiums the following month.

  SPPC is responsible for the pre-development, tendering and subsequent offtaking of the energy from the projects.

  US/India-based Synergy Consulting is the client's financial adviser for the NREP sixth-round tender. Germany’s Fichtner Consulting and US-headquartered CMS are the technical and legal consultants, respectively.

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  Jennifer Aguinaldo
• 
  Iraq approves two major energy project contracts

  Administrator

  2 April 2025

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  Iraq’s Council of Ministers has approved two major energy contracts that form part of the $10bn Gas Growth Integrated Project (GGIP), according to a statement from the prime minister’s office.

  French oil and gas company TotalEnergies and its partners are developing the GGIP.

  TotalEnergies is the main operator of the GGIP. Basra Oil Company (30%) and QatarEnergy (25%) are the other stakeholders.

  One of the two awarded contracts is focused on the development of the Ratawi gas field and the other is focused on the Common Seawater Supply Project (CSSP), which will transport seawater to oil fields for injection to increase production.

  The statement said that Iraq's Council of Ministers had approved the award of tender CSSP-ITT-06 from state-owned Basra Oil Company to China Petroleum Pipeline Engineering Corporation (CPP).

  The contract awarded to CPP is for the pipeline package, which involves the construction of a seawater pipeline.

  MEED reported that CPP was a frontrunner to win the pipeline package in May last year.

  CPP is a subsidiary of China National Petroleum Corporation and the primary builder of pipelines in its home country.

  The pipeline package is one of two major packages in the CSSP. The other major package focuses on developing a water processing facility.

  The pipeline contract awarded to CPP will be executed over 54 months, including 42 months for engineering, procurement and construction and 12 months for operation, maintenance and training.

  The second contract that has been approved is for a planned gas processing plant at the Ratawi gas processing complex project.

  The Ratawi field is also sometimes called the Artawi field.

  This contract has been awarded by Iraq’s state-owned South Gas Company to China Petroleum Engineering & Construction Corporation (CPECC).

  In January, MEED revealed that CPECC had emerged as the frontrunner to win the contract, which is estimated to be worth about $1.7bn.

  When commissioned, the planned facility is expected to process 300 million cubic feet a day of gas. Its capacity is expected to double when a second expansion phase becomes operational in the future.

  The Ratawi gas processing facility project aims to improve Iraq’s electricity supply by capturing gas that would have otherwise been flared at several oil fields, including:

  • Luhais
  • Majnoon
  • Ratawi
  • West Qurna 2
  • Tuba

  Large gas volumes are flared from these oil fields, causing significant environmental damage. Collecting and processing flared gas will generate increased hydrocarbons revenues and reduce ecological damage.

  The gas tapped and processed from the oil fields will then be used to supply power plants, helping to reduce Iraq’s power import bill.

  As well as supplying Iraq’s national gas network to generate electricity, the Ratawi gas processing complex will increase the production of gas products, including liquefied petroleum gas (LPG) and condensates.

  US-based consultant KBR has performed the front-end engineering and design work on the project.

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  Wil Crisp
• 
  Mitsubishi Power confirms Rumah 1 and Nairiyah 1 deal

  Administrator

  2 April 2025

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  Mitsubishi Power, part of Japan’s Mitsubishi Heavy Industries, has confirmed it has received two orders to supply six M501JAC gas turbines for the Rumah 1 and Al-Nairiyah 1 power generation projects in Saudi Arabia.

  Rumah 1 is located in the Central Region in Riyadh and is part of the previously planned Riyadh Power Plant 15. Nairiyah 1 is located in the Eastern Region.

  The scope includes the supply of generators and auxiliary equipment, Mitsubishi Power said in a statement.

  MEED exclusively reported that the Japanese original equipment manufacturer had been selected to supply its gas turbines for the independent power project (IPP) in November last year.

  A consortium comprising the local Saudi Electricity Company (SEC) and Acwa Power and South Korea’s Korea Electric Power Corporation (Kepco) won the contract to develop the Rumah 1 and Al-Nairiyah 1 IPP the same month.

  The power plants will deliver a combined 3.6GW, accounting for nearly 2.5% of the national grid’s capacity.

  The M501JAC turbines will be assembled at Mitsubishi Power Saudi Arabia’s Dammam factory.

  The 17,730 square-metre facility also provides services for gas turbine components.

  According to Mitsubishi Power, the plant features "a majority of Saudi employees, in line with the firm’s Saudi National programme".

  China’s Sepco 3 and South Korea's Doosan Enerbility will undertake the engineering, procurement and construction (EPC) contract for the projects, as MEED reported.

  The SEC, Acwa Power and Kepco team offered a levelised electricity cost (LCOE) of $cents 4.5859 a kilowatt-hour ($c/kWh) for Rumah 1 and 4.6114 $c/kWh for Al-Nairiyah 1.

  Acwa Power said that the two IPPs will require a combined investment of approximately SR15bn ($4bn). The IPPs are expected to reach commercial operations in Q2 2028. 

  Saudi Power Procurement Company (SPPC) received bids for the contracts for four thermal IPPs – the other two being the similarly configured Rumah 2 and Al-Nairiyah 2 – in August last year.

  The four power generation facilities will be developed using a build, own and operate model over 25 years. 

  SPPC’s transaction advisory team for the Rumah 1 and 2 and Al-Nairiyah 1 and 2 IPP projects comprises US/India-based Synergy Consulting, Germany’s Fichtner and US-headquartered Baker McKenzie. 

  Photo credit: Mitsubishi Power (for illustrative purposes only)

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13599792/main4910.jpg

  Jennifer Aguinaldo