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• 
  FDI trends align with Vision 2030

  Administrator

  3 October 2024

  

   

  This package also includes: Riyadh redoubles efforts to boost inward investment

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  Foreign direct investment (FDI) trends are typically volatile and impacted by economic and political factors.

  According to a report on FDI by GlobalData, there was a decline in both project numbers and capital investment in 2023 after a strong year in 2022. 

  While the overall numbers were down, the report highlighted global trends that include a strong investor focus on the Middle East and elsewhere in Asia, outside of China, with Saudi Arabia and the UAE identified specifically as markets that offer strong potential. 

  According to a GlobalData poll, the Middle East ranked as the fourth most attractive region for FDI in 2024 by investor sentiment.

  Middle East deals 

  In terms of deals, the Middle East experienced annual growth in both project activity and inbound capital investment from FDI in 2023. Companies announced 1,848 projects worth an estimated $88.3bn. Geopolitics, strategic partnerships, digitalisation, emissions reductions and artificial intelligence are the key themes causing investors to expand in the region. 

  The UAE was the largest destination country in the region with $23bn of deals across 1,277 projects, which also made it the third-largest FDI market in the world in 2023 based on project activity. 

  Saudi Arabia was the second-largest destination country in the region based on project activity. According to GlobalData, the kingdom attracted inward investment of $17.3bn from 305 FDI projects, which represents a growth of 23% in inward FDI investment in 2022-23. 

  Core sectors

  A detailed analysis of the Saudi FDI data shows that some sectors have been more successful than others. The numbers show that the core sectors of Vision 2030 have been best placed when it comes to attracting FDI.

  The most successful sector in terms of value is metals and minerals. There have been $9.5bn of metals and minerals projects announced in the kingdom, which is significantly more than the second-largest sector, renewables and alternative power, which has attracted $5.4bn of deals. 

  Metals and minerals are an increasingly important sector for Saudi Arabia. The kingdom says its natural resources are worth $2.5tn – an increase of more than 90% compared with 2016 estimates.

  To help monetise these reserves, Riyadh enacted a new mining investment law in 2021, and since then the Ministry of Industry & Mineral Resources (MIMR) has awarded more than 2,000 mining permits to local and foreign firms under its accelerated exploration initiative.

  Renewables and alternative power is also an important sector for FDI, with foreign players investing in power generation projects that are delivered on a public-private partnership basis. 

  Not all projects are announced with a value. Based on the number of FDI projects rather than the aggregate of their announced value, the best-performing sector is tourism, with 271 projects, followed closely by business and professional services, with 270 projects. 

  Tourism is another key pillar of Vision 2030. It has been identified as a focal point for Saudi Arabia’s economic transformation because it opens up the kingdom to foreign visitors, while at the same time creating jobs and investment opportunities.

  When analysed based on business function, manufacturing is the leading sector based on deal value, while construction is the largest sector when measured by the number of projects. Both of these sectors are playing a key role in delivering the objectives of Vision 2030. 

  Manufacturing investments are helping develop jobs and investment opportunities in Saudi Arabia, while also keeping Saudi spending within the kingdom and securing supply chains. This is highlighted clearly by the kingdom’s various moves into the automotive manufacturing space, which aims to establish Saudi Arabia as a key supplier of vehicles for both the local and international markets. 

  Construction underpins many of the other sectors being developed in Saudi Arabia as much of the new economic activity that is planned needs new facilities. Whether it be hotels for tourism, factories for manufacturing or office buildings for professional services, there is a wide range of construction projects planned and underway in the kingdom. 

  FDI landmarks

  Notable breakthroughs in FDI in Saudi Arabia this year highlight these trends shown by the data. The first major deal involves manufacturing and was reported in January when Turkish steelmaker Tosyali Holding revealed plans to invest up to $5bn in a new steel plant in the kingdom.

  Another manufacturing deal came when The Saudi Arabian Industrial Investments Company (Dussur) divested its 55% ownership in General Electric Saudi Advanced Turbines (Gesat) to GE Vernova, giving the US-headquartered firm full ownership of the manufacturer.

  For construction, the National Housing Company (NHC) has signed several major deals with foreign investors. In April, NHC and Urbas Middle East Real Estate Company, a subsidiary of Spain’s Urbas Group, signed an agreement to develop over 589 residential units in NHC’s Al-Fursan suburb of Riyadh.

  In March, NHC signed another deal with Egyptian real estate developer Talaat Moustafa Group (TMG) to develop over 27,000 residential units at NHC’s Banan City project, which is also in the Al-Fursan suburb of Riyadh. 

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  Colin Foreman
• 
  Bringing scale to project delivery

  Administrator

  3 October 2024

  

   

  A US-based project services company has quietly grown over the past seven years into a global entity with $15bn of revenue and operations in over 100 countries, including key Middle East markets.

  That company is Global Infrastructure Solutions Inc (GISI). It was founded in 2017 by a group of industry veterans, including Dick Newman and John Dinisio, who previously founded another industry giant, Aecom. 

  “The founders are legends in the industry. Dick Newman, in many respects, shaped the modern engineering and consulting business. John Dinisio is another key leader, and so is Jeff Kissel. They are a group of highly experienced, very accomplished leaders that got together in 2017 and founded the business, and in that short period built a business of over 15,000 staff,“ says Derek Amidon, chief operating officer of GISI.

  Business structure

  The business is structured into four broad segments: infrastructure, earth and environment, international development and infrastructure in Asia. 

  The main business for infrastructure is Hill International, which merged with GISI in December 2022. Hill has a strong track record of delivering major projects in the Middle East, including the Palm Jumeirah, Abu Dhabi Airport and Riyadh Metro. 

  The Middle East is also an important region for GISI and, having grown up in the region as a child, one that holds a special place for Amidon. “I have always been interested in the Middle East, and it is a key area of focus for us. We are strengthening our presence and serving important clients. Hill International has worked on some of the most transformative projects that have helped define the modern Middle East,” he says. 

  Global spending on infrastructure right now is at record levels” 
  Derek Amidon, GISI

  The Middle East is just one global market offering strong promise for GISI. “Global spending on infrastructure right now is at record levels, and the demands from clients for our services are very high,” says Amidon. 

  Using a sporting reference, Amidon highlights GISI’s scale and the ability to call upon the experience of its global network of staff as a key differentiator. “We are a firm with a very deep bench of capability. Our global footprint has positioned us well to support our clients and their projects.” 

  People are crucial for successfully delivering projects. “In the Middle East, we are becoming a valuable resource for clients. We are working on key programmes and that will continue to fuel our growth. Our growth has been phenomenal up until now, and that is tied to our ability to attract the best talent in the industry,” says Amidon.

  Looking ahead, GISI is committed to the region and is mindful that it will have to negotiate challenges along the way. “Clearly, there are tensions in the Middle East, but I think we are experienced enough to roll with those tensions. Challenges do not daunt us. We seek to make smart decisions and have good collaborative relationships with our clients,” says Amidon. 

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  Colin Foreman
• 
  UAE’s high-speed rail moves ahead

  Administrator

  3 October 2024

  Etihad Rail asked contractors over the summer to submit prequalification forms by October for a contract to design and build the civil works packages for the high-speed rail (HSR) line connecting Abu Dhabi and Dubai.

  The design speed of the trains running on the network will be 350 kilometres an hour (km/h) and the operating speed will be 320km/h.

  The proposed HSR programme will be constructed in four phases, gradually adding further connectivity to other areas within the UAE.

  The first phase involves the construction of a railway line connecting Abu Dhabi and Dubai, which is estimated to be operational by 2030.

  The second phase will involve the development of an inner-city railway network with 10 stations within Abu Dhabi city.

  The third phase of the railway network involves the construction of a connection between Abu Dhabi and Al-Ain.

  The fourth phase involves the development of an inter-emirate connection between Dubai and Sharjah.

  The 150-kilometre (km) first phase of the HSR line will stretch from the Al-Zahiyah area in Abu Dhabi to Al-Jaddaf
  in Dubai.

  The project’s civil works have been split into two packages comprising four sections, the scope of which includes:

  • Phase 1A: Al-Zahiyah to Yas Island in Abu Dhabi (23.5km)
  • Phase 1B: Yas Island to the border of Abu Dhabi/Dubai (64.2km)
  • Phase 1C: Abu Dhabi/Dubai border to Al-Jaddaf in Dubai (52.1km)
  • Phase 1D: Abu Dhabi airport delta junction and connection with Abu Dhabi airport station (9.2km)

  The HSR project is also expected to include significant tunnelling works totalling 31km.

  Five stations

  The rail line will have five stations. These will be in Al-Zahiyah (ADT), Saadiyat Island (ADS), Yas Island (YAS), Abu Dhabi airport (AUH) and the Al-Jaddaf (DJD) area of Dubai.

  The ADT, AUH and DJD stations will be underground, while ADS will be an elevated station and YAS will be at grade.

  The overall HSR package also includes provisions for the rolling stock, railway systems and two maintenance depots.

  The high-speed project will slash journey times between the UAE’s two largest cities and economic centres. The journey time between the YAS and DJD stations will be 30 minutes.

  Dubai-based Matcon Testing Laboratory and Abu Dhabi’s Engineering & Research International are conducting drilling tests to ascertain the ground conditions in areas through which the HSR line will pass.

  Spanish engineering companies Sener and Ineco are the project’s engineering consultants. French engineering firm Systra has been confirmed as the project management consultant for the first phase of the project.

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  Yasir Iqbal
• 
  Ducab undaunted by global market headwinds

  Administrator

  3 October 2024

  

   

  The adoption of a business expansion strategy about three years ago has taken Ducab Group to new markets and opened up new industrial sectors. More importantly, the strategy has positioned the company to better withstand global economic challenges, says group CEO Mohammad Almutawa. 

  Ducab Group, which is equally- owned by the Investment Corporation of Dubai (ICD) and Abu Dhabi’s ADQ, registered a year-on-year earnings before interest, taxes, depreciation and amortisation (Ebitda) of 31%, as of the end of the first half of this year. 

  “The Ducab strategy has three pillars – optimisation of existing assets and businesses, diversifying our revenue streams and enhancing our organisation,” Almutawa said. 

  “We still expect a record year for Ducab, whether it is from a capacity and production point of view, or from a market penetration and market expansion perspective, or from profitability,” he told MEED. 

  Ducab Group recently announced that its subsidiary, Ducab Metals Business, will double its output of aluminium products from 55,000 tonnes a year (t/y) to 110,000 t/y.

  Ducab Metals Business will build the new aluminium products facility in Khalifa Economic Zone Abu Dhabi (Kezad), where it already owns a 50,000 square-metre facility, the company said at a conference in Abu Dhabi on 5 September. In May, the firm signed a 50-year land lease agreement with Kezad to acquire a 51,015 sq m plot, on which it will build the new plant.

  Meeting demand 

  The investment in increasing production capacity will help meet rising demand for aluminium products at home and overseas, the company’s leadership said at the event titled ‘Ducab Metals Business Expansion Forum: Advancing capacity, driving innovation’, held in partnership with MEED. 

  “This [production capacity] expansion will allow us to enter the AED7bn [$1.9bn] revenue club. We are moving from AED6.6bn, and adding another AED600m,” revealed Mohamed Al-Ahmedi, CEO of Ducab Metals Business. 

  “We are in the hot metals line in Kezad. We are getting aluminium as feedstock from [Emirates Global Aluminium] EGA, producing it, and using Khalifa Port to export the products,” he said to MEED. 

  “The new facility is expected to be commissioned by the end of the year, and we will start producing next year. The facility is in an advanced stage of construction,” Al-Ahmedi further said. 

  Market challenges 

  As a supplier of aluminium and copper products, as well as electric cables of various specifications to multiple industries around the world, Ducab Group is not immune to challenges prevalent in the global economic landscape.  

  

  “The geopolitical situation has impacted us [financially],” Almutawa said. There are “difficulties arising from supply chain disruptions, competition, and shifting of capacities around the world. I will attribute this more to severe competition than economic slowdown. I think the sector [metal products] is a challenging one. There is overcapacity”, he commented.

  “There is a sort of a shift of appetite from globalisation to regionalisation. Countries putting up trade barriers and tariffs. This is definitely one of the risks that we try to look at consciously,” Al-Ahmedi said.

  Almutawa added: “It’s a change in the behaviour of the market. It is a challenge. Overall, the world is becoming quite small [commercially conservative].”

  “While, previously, people were looking at expansions through acquisitions to increase capacities, increase efficiencies and manufacturing abilities, there is an added element of market access now, which forces you, some time, to move your investment offshore in order to secure the growth,” Almutawa further explained. 

  In April this year, Ducab Metals Business completed the acquisition of GIC Magnet, a supplier of paper-insulated aluminium strips, among other products. GIC Magnet “is a UAE manufacturing entity with ties back to India. We acquired this company earlier this year and integrated it into Ducab as part of the expansion”, Al-Ahmedi stated. 

  “We expect around $40m of additional revenues through this acquisition. To us, this acquisition is one of the gateways to enter into a new business,” he remarked. 

  Almutawa affirmed he is eyeing targets for acquisitions as a way to grow the business. “We are looking at more acquisitions. We are looking for both organic and inorganic growth,” the group CEO revealed. 

  Business growth 

  Ducab Group’s portfolio mainly comprises two subsidiary companies – Ducab Metals Business and Ducab Cables Business. 

  “DCB continues to focus on growing [its presence/share] in the oil and gas market and increasing its contribution. We are not supplying to the UAE and GCC only. We supply to oil and gas customers in Australia, the UK, Europe, Asia, Far East and India,” Almutawa said. 

  Ducab Group has been a major supplier of equipment to the oil and gas industry since inception, and has been primarily catering to projects of Abu Dhabi National Oil Company (Adnoc Group), among other regional and global customers. 

  Almutawa revealed that Ducab has won orders to supply products to Adnoc’s $17bn Hail and Ghasha sour gas megaproject and Adnoc Group subsidiary, Al-Dhafra Petroleum’s Haliba field development projects. 

  “We are doing extremely well [with oil and gas customers]. We are based in an oil-predominant economy in the UAE. We have always contributed to it by providing the capabilities and diversity, and by introducing technical know-how, and by expanding our contribution to that sector,” Almutawa said. 

  On the question of expanding Ducab Group’s copper segment, Almutawa said: “We are looking at further optimising our copper lines to squeeze more out of it. There are no plans for a straightforward capacity expansion.  

  “In the energy sector, there is a huge transition from copper to aluminium. This does not mean that copper is going to reduce. But the usage of aluminium has increased considerably. Hence the expansion in the aluminium business. 

  “Going forward, 2025 is going to continue to be a difficult year. But I think Ducab is in a much better shape to face that,”
  Almutawa said. 

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  Indrajit Sen
• 
  Neom desalination project attracts four bidders

  Administrator

  3 October 2024

  Enowa, the utility subsidiary of Saudi gigaproject developer Neom, has received bids from companies for a contract to build a new seawater reverse osmosis (SWRO) desalination plant with a capacity of 150 million litres a day (l/d) in Neom, Saudi Arabia's SR1.5tn ($500bn) gigaproject.

  According to industry sources, the firms that submitted bids for the contract include

  • Alfanar Company (local)/ Abengoa (Spain)
  • China Machinery Engineering Corporation (CMEC)
  • Orascom (Egypt) / Wetico (local)
  • VA Tech Wabag  (India) 

  The project, which has an equivalent capacity of 150,000 cubic metres a day (cm/d), was previously known as the Moonlight desalination plant.

  Enowa tendered the engineering, procurement and construction contract in April with an initial bid deadline of 22 May.

  The SWRO plant will be adjacent to the 125 million l/d desalination plant at Duba on Saudi Arabia’s Red Sea coast. 

  The project is expected to take 12 months to complete.

  Neom said the plant will treat seawater with total dissolved solids of up to 42,000 milligrams a litre.

  The project scope includes:

  • Offshore intake towers and pipelines 
  • Seawater intake and screening station
  • Feed intake chlorination system
  • Media filtration or MF/UF membranes
  • Reverse osmosis first pass
  • Reverse osmosis second pass
  • Post-treatment and stabilisation
  • Automated clean-in-place system
  • Waste treatment unit
  • Reject disposal and outfall

  The selected contractor is also expected to build the necessary storage tanks for the desalinated and stabilised water, an operator control room and programmable logic control and Scada systems.

  To meet the short deadline, Neom has asked contractors to confirm whether they already possess a design for an existing plant that can be used for the project.

  In May, Enowa confirmed the cancellation of a project to develop a renewable-energy-powered advanced SWRO project with zero liquid discharge in Oxagon, Neom’s industrial cluster.

  The scope of the cancelled project's first phase, which was due to be developed by a team of Japan's Itochu Corporation and France's Veolia, included a desalination plant with a production capacity of 500,000 cm/d of desalinated water.  

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  Jennifer Aguinaldo
• 
  Jeddah Tower cements region’s status as global high rise capital

  Administrator

  2 October 2024

  

   

  > This package also includes: Contractor appointed to complete world's tallest tower

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  The appointment of Saudi Binladin Group (SBG) on 2 October to complete the 1,000-metre-plus-tall Jeddah Tower in Saudi Arabia will cement the region's status as the global high-rise capital. Dubai's Burj Khalifa has been the world's tallest tower since 2009, and the completion of Jeddah Tower will mean the region's run as home to the world's tallest building will continue for many more years. Here is a list of the region's tallest buildings:

  1. Burj Khalifa, UAE

  The construction of the world’s tallest skyscraper, Burj Khalifa, began in 2006 and reached its pinnacle in 2009.

  The 829.8-metre-tall tower was developed by Dubai’s Emaar Properties and designed by US-based Skidmore Owings & Merrill.

  Construction was led by a consortium of South Korea’s Samsung C&T, the local/Belgian Bel Hasa Six Construct and the local Arabtec Construction. The $875m main construction contract was awarded in December 2004.

  The 163-storey tower took 22 million man-hours to build. Overall, the project cost about $1.5bn to complete. 

  2. Mecca Royal Clock Tower, Saudi Arabia

  The 601-metre-tall Mecca Royal Clock Tower is the landmark feature of the Abraj al-Bayt complex.

  The development comprises seven towers overlooking the holy site of Kaaba, with a total built-up area of more than 1.4 million square metres and 15,000 apartments.

  Saudi Binladin Group was the main contractor for the project.

  The $800m contract for the clock tower was awarded in 2003 and the complex completed in 2012.

  3. Marina 101, UAE

  Marina 101 is the second-tallest building in Dubai.

  Construction began in 2007 when Turkish contractor TAV was awarded the estimated AED800m ($218m) main contract.

  The project involved building a 101-floor tower with a height of 425 metres and a total built-up area of 144,000 sq m.

  The project has witnessed several setbacks over the years and remains unoccupied. The construction works were partially completed in 2017.

  4. Princess Tower, UAE

  Princess Tower is the second-tallest residential building in the world.

  The 107-storey tower stands 413 metres tall and is located in Dubai Marina.

  The project was announced in 2005 and the foundation works were completed in 2007.

  The main contractor for the project was the Lebanese Arabian Construction Company.

  The Princess Tower was the world’s tallest residential building from 2012 to 2015, when it was overtaken by 432 Park Avenue in New York City.

  5. Al-Hamra Tower, Kuwait

  The 80-floor Al-Hamra Tower is the tallest building in Kuwait and the 36th tallest in the world, at 412 metres. It was built by the local Ahmadiah Contracting & Trading Company. Construction works started in 2005 and were completed in 2011. The project was designed by US-based architectural firms Skidmore, Owings & Merrill, Callison and the local Al-Jazirah Engineers & Consultants. 

  6. 23 Marina, UAE

  The 392-metre-tall 23 Marina is the fourth-tallest building in the UAE and the 40th tallest in the world. Dubai Civil Engineering constructed the 88-floor tower. The construction works started in 2005 and the project was completed in 2012. US-based KEO International and Indian Architect Hafeez Contractor designed the tower. 

  Jeddah Tower restart is watershed moment

  7. PIF Tower, Saudi Arabia

  The Public Investment Fund (PIF) Tower is located within Riyadh’s King Abdullah Financial District. US-based HOK Architects, Canadian WSP, Hyder Consulting and the local Omrania Associates designed the 385-metre-tall, 80-storey tower. The construction works began in 2009 and were finally completed in 2022. Saudi Binladin Group was the main project contractor.

  8. Iconic Tower, Egypt

  The 385-metre-tall Iconic Tower is the centrepiece among the 20 buildings of the Central Business District in Egypt’s New Administrative Capital. The construction of this 80-storey tower started in 2019 when China State Construction Engineering Corporation was appointed as the main contractor. The construction works on Africa’s tallest skyscraper were completed in 2022. Lebanese engineering company Dar al-Handasah was the project consultant. 

  9. Burj Mohammed bin Rashid, UAE

  Completed in 2014, Abu Dhabi’s tallest building measures 381 metres and consists of 88 floors. The tower, part of the Abu Dhabi World Trade Centre, was announced in 2004. The construction works started in 2007 under the government’s redevelopment plan. The consultants involved in the development included Arup, Mott MacDonald, Foster & Partners, AtkinsRealis and Callison. Lebanese contractor Arabian Construction Company undertook the construction works.

  10. Elite Residence, UAE

  Dubai Marina’s Elite Residence, a 91-storey residential building, is the sixth-tallest building in the UAE. The 380-metre-tall tower was announced in 2006 and designed by Lebanese Khatib & Alami. The construction works began in 2007 when Arabian Construction Company was awarded the main construction contract. The tower has been operational since 2012.

  SOON TO JOIN GCC countries’ quest to build tall towers is not over yet. Several upcoming developments are likely to overthrow some of the tall towers on our list. These schemes include: The North Pole, 2kms (Saudi Arabia) Burj Azizi, 725 metres (UAE) Pentominium Tower, 516 metres (UAE) Burj Binghatti, 500+ metres (UAE)

  Tallest towers in the world

  

  Jeddah Tower image (top): Jeddah Economic Company

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  Yasir Iqbal
• 
  World Cup stadiums attract international contractors

  Administrator

  2 October 2024

  Commentary
  Colin Foreman
  Editor

  Register for MEED's 14-day trial access 

  A joint venture of Spain’s FCC and the local Nesma & Partners has been awarded the contract to build the Mohammed Bin Salman Stadium at Qiddiya.

  The project involves building a 45,000-seater stadium on top of the 200-metre-high Tuwaiq cliff and is a key step forward in Saudi Arabia’s World Cup infrastructure build programme.

  The contract award is also the latest demonstration of how high-profile stadium projects continue to attract the world’s leading international construction companies despite their reputation for being risky projects that often result in financial losses. Past losses have been so great that stadium projects have even been called contractor busters.

  Stadiums attract contractors because they are architectural statements with complex designs. They also typically have fixed deadlines for a major sporting event, such as an Olympics or a World Cup, which means time is more of a priority than costs.

  Those two key factors that attract contractors are also major risks. Complex designs are expensive to build and require specialist engineering and subcontractors. This complexity, combined with tight deadlines, means these works often run over time and budget.

  Managing this risk is a major challenge, and it is why these projects require international contractors who have worked on similar projects in the past. FCC has worked on several major stadium projects around the world, including Real Madrid’s Santiago Bernabeu Stadium, which was recently recognised as the best stadium in the world in 2024 by the World Football Summit.

  The company also has experience working on stadiums in the Middle East and North Africa region. It was the contractor for a 50,000-seater football stadium in Algeria and, through its subsidiary Alpine, the Dubai Cricket Stadium in the UAE. 

  FCC is not the only international contractor to have signed up to work on Saudi Arabia’s World Cup stadiums this year.

  A joint venture of Belgian contractor Besix and the local Albawani has been awarded the contract to build the 47,000-seater Aramco football stadium in Al-Khobar. Beijing-headquartered China Railway Construction Corporation and local contractor Sama Construction for Trading & Contracting won the contract to construct the Jeddah Central stadium project.

  The contract awards this year are just the start, and as momentum on the Saudi World Cup build programme gathers pace, more international contractors will seek work in the future.

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  Colin Foreman
• 
  Aramco officially awards Jafurah third expansion phase contract

  Administrator

  2 October 2024

  

  Register for MEED's 14-day trial access 

  Saudi Aramco has officially awarded the main contract for engineering, procurement and construction (EPC) works on the third expansion phase of its Jafurah unconventional gas development in Saudi Arabia.

  A consortium of Spanish contractor Tecnicas Reunidas and China’s Sinopec Group has been awarded the main EPC contract for the Jafurah third expansion phase, according to sources.

  Aramco issued the letter of award to the Tecnicas Reunidas/Sinopec consortium on 25 September, sources told MEED.

  Tecnicas Reunidas announced in July that it had received a non-binding letter of intent from Aramco for the main EPC contract for the Jafurah third expansion phase.

  In a filing with the Madrid Stock Exchange on 22 July, the Spanish contractor estimated the contract’s value at $2.24bn.

  In its disclosure, Tecnicas Reunidas added that it is the leader of its consortium with Sinopec, holding a 60% stake, implying that its share of the Aramco contract could be worth $1.34bn.

  The Jafurah third expansion phase project aims to increase the gas production and processing capacity of the Jafurah unconventional gas development, located in the kingdom’s Eastern Province, through the addition of new facilities.

  The EPC scope of work entails building three gas compression plants, each capable of processing 200 million cubic feet a day (cf/d).

  The scope of work also includes building a 230kv substation to power the new gas compression plants and installing other utilities units, piping systems and safety equipment.

  In July, Tecnicas Reunidas said it expects EPC work on the Jafurah third expansion phase to be completed in 44 months, with up to 400 engineers deployed on the project.

  The Spanish/Chinese consortium began executing EPC works on the project in July, soon after receiving the letter of intent from Aramco, as per sources.

  The other bidders for the project’s EPC contract were India-headquartered Larsen & Toubro Energy Hydrocarbon and Japan’s JGC Corporation.

  Jafurah unconventional gas programme

  Aramco has registered swift progress this year with the successive, multibillion-dollar expansion phases of its programme to produce and process gas from the massive Jafurah unconventional development in Saudi Arabia.

  Aramco officially awarded contracts on 30 June for the Jafurah second expansion phase, which aims to raise its processing potential to up to 2 billion cf/d of raw gas produced from the Jafurah field.

  Aramco awarded 16 contracts worth about $12.4bn for EPC works and drilling services for the second expansion phase.

  The Tecnicas Reunidas and Sinopec consortium’s announcement that Aramco had selected them for EPC works on the third expansion phase came within weeks of contract awards for the second expansion phase.

  Also in July, Aramco issued the main EPC tender for the fourth expansion phase. Contractors are preparing bids for the project, which has a scope of work similar to the third expansion phase and is, hence, understood to be of comparable value.

  ALSO READ: Robust Aramco spending lifts Saudi upstream market

  In parallel, EPC works are also progressing on the first phase of the programme, for which Aramco awarded $10bn-worth of subsurface and EPC contracts in November 2021.

  Located in Saudi Arabia’s Eastern Province, the Jafurah basin hosts the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. This shale play covers an area of 17,000 square kilometres.

  Production and processing of gas from this giant unconventional reserve is crucial for Aramco to achieve its ambition of increasing gas production by 60% by 2030, with 2021 as its baseline.

  In February 2020, Aramco received a capital expenditure grant of $110bn from the Saudi government for the long-term phased development of the Jafurah unconventional gas resource base.

  With its 2030 target locked, industry sources believe Aramco has already drawn up plans for six expansion phases to develop the Jafurah basin. The next two phases, they say, could also be tendered between now and the second half of 2025.

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  Indrajit Sen