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  Dubai budgets to increase construction spending by 18%

  30 October 2024

  Dubai has announced its budget for 2025 with a 9% increase in government spending, which includes an extra $1.6bn allocated for construction and infrastructure compared to the approved budget for 2024.

  Of the AED86.26bn ($23.5bn) of planned spending, 46%, or AED39bn ($10.6bn), will be allocated for construction and infrastructure schemes.

  “These projects encompass roads, tunnels, bridges, transportation systems, sewage stations, parks, renewable energy facilities and the rainwater drainage network development plan. This also includes the recently announced Al-Maktoum airport development project and other initiatives supporting quality of life and promoting smart and sustainable transportation strategies in Dubai,” the emirate’s finance department said in a statement.

  The spending on construction and infrastructure planned for 2025 is 18% more than the AED33.2bn allocated for 2024.

  Increasing construction spending will help the emirate overcome some of its most pressing infrastructure challenges. Traffic has become a major issue for many residents and businesses in Dubai. Over the past year, the emirate’s Roads & Transport Authority (RTA) has pressed ahead with a series of road projects aimed at alleviating congestion. The most recent road project to be announced is the AED696m upgrade to the Trade Centre roundabout in Dubai.

  Metro plans

  A new metro line is also planned. In October, contracting consortiums submitted bids for the contract to complete a new Blue Line that will form part of the Dubai Metro network. The lowest-priced base offer received for the contract was valued at AED22.3bn. The project was given a budget of AED18bn when approved by the government in late 2023.

  Another infrastructure concern is maintaining Dubai’s status as a leading global aviation hub. Dubai International airport is operating at close to capacity. With no room to add to its two existing runways, a major new airport project is planned at Al-Maktoum International airport. Designs for that project, valued at $35bn, were approved by the government in April and all operations at Dubai International airport are scheduled to move there within 10 years. Tendering for major construction contracts is expected to start in 2025.

  Another pressing infrastructure concern is drainage. Widespread flooding in April this year exposed many shortcomings of the emirate’s infrastructure. In June, the government approved a AED30bn project known as Tasreef, which will enhance the capacity of Dubai’s rainwater drainage system by 700%, covering all areas of the emirate.

  The emirate’s sewage system will also be upgraded with the $22bn Dubai Strategic Sewerage Tunnels (DSST) project. This project will be delivered as a public-private partnership. Potential investors submitted their statements of qualifications (SoQs) in late October.

  Spending approval

  The 2025 budget was approved by Sheikh Mohammed Bin Rashid Al-Maktoum, Vice President, Prime Minister and Ruler of Dubai, on 29 October.

  The estimated expenditure for 2025 is a 9% increase on the AED79.1bn of spending that was budgeted for 2024 in November 2023. As well as expenditure of AED86.26bn for 2025, revenues are projected to be AED97.66bn. The budget also includes a general reserve of AED5bn.

  The 2025 budget also allocated 30% of government expenditures to the social development sector. This encompasses health, education, scientific research, housing, and support for needy families, women and children. It also includes investments in youth and sports, and care for the elderly, retirees and people of determination.

  The security, justice and safety sectors will receive 18% of total expenditures. The emirate has also allocated 6% of spending to support the public services sector, government excellence, creativity, innovation and scientific research.

  The 2025 budget is part of the three-year budget cycle for 2025-27, which Sheikh Mohammed also approved. It has a total expenditure of AED272bn and a total revenue of AED302bn, making it the largest in the emirate’s history.

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  Colin Foreman
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  Linde wins Hail and Ghasha project CO2 capture contract

  30 October 2024

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  Germany-headquartered Linde Engineering has announced winning a contract to provide carbon capture technology for Abu Dhabi National Oil Company’s (Adnoc) estimated $17bn Hail and Ghasha sour gas field development project.

  The deal has been awarded to Linde as a sub-contract by NextChem, a subsidiary of Italy-based Maire, the main contractor performing engineering, procurement and construction (EPC) works on the $8.74bn onshore package of the Hail and Ghasha project.

  In June, Maire appointed NextChem as the technology design integrator to develop the process design package (PDP) for the hydrogen and carbon dioxide (CO2) recovery unit of the Hail and Ghasha onshore package.

  As part of its contract, Linde will provide its adsorption-based carbon capture technology Hisorp CC, plus the core units, to capture and purify CO2 for sequestration (CCS). The CO2 recovery facility will have a total capacity to capture and store 1.5 million tonnes a year of emissions from the Hail and Ghasha scheme.

  Linde’s Hisorp CC is an electrically-driven technology that can power the carbon capture process with renewable energy. It combines pressure swing adsorption with cryogenic separation and compression to achieve CO2 capture rates of over 99%. The process does not require steam for regeneration, so it does not increase the carbon footprint.

  Hail and Ghasha scheme

  The Ghasha concession consists of the Hail and Ghasha fields, along with the Hair Dalma, Satah, Bu Haseer, Nasr, Sarb, Shuwaihat and Mubarraz fields.

  Adnoc Group owns and operates the Ghasha concession, holding the majority 55% stake. The other stakeholders in the asset are Italian energy major Eni with a 25% stake, Thailand’s PTTEP Holding with 10% and Austria’s OMV and Russia’s Lukoil with 5% interests each.

  Adnoc expects total gas production from the concession to ramp up to more than 1.5 billion cubic feet a day (cf/d) before the end of the decade. This target will mainly be achieved through the Hail and Ghasha sour gas development project.

  In October last year, Adnoc and its partners awarded $16.94bn of EPC contracts for its Hail and Ghasha project – the biggest capital expenditure made by the Abu Dhabi energy company on a single project in its history.

  While Adnoc awarded the onshore EPC package to Tecnimont, the offshore EPC package was awarded to a consortium of Abu Dhabi’s NMDC Energy and Italian contractor Saipem.

  The $8.2bn contract relates to EPC work on offshore facilities, including facilities on artificial islands and subsea pipelines.

  Prior to reaching the final investment decision on the Hail and Ghasha project last year, the Ghasha concession partners, led by Adnoc, awarded two EPC contracts worth $1.46bn in November 2021 to execute offshore and onshore EPC works on the Dalma gas development project.

  ALSO READ: Tecnimont awards sub-contracts on Hail and Ghasha scheme

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  Indrajit Sen
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  Dubai receives $22bn tunnels investor prequalifications

  30 October 2024

  

   

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  Potential investors have submitted their statements of qualifications (SoQs) for a contract to develop and operate various packages of the $22bn Dubai Strategic Sewerage Tunnels (DSST) project.

  MEED understands that the project client, the Dubai Municipality, received SoQs from over a dozen companies, including several prequalified as engineering, procurement and construction (EPC) contractors for the project’s first four packages.

  According to industry sources, the companies that are keen to prequalify as investors or sponsors of the planned public-private partnership (PPP) project include:

  • Abrdn Investcorp Infrastructure Investments Manager (UK)
  • Besix (Belgium)
  • China Railway Construction Corporation (CRCC)
  • China Railway Engineering Group (CREG)
  • China State Construction Engineering Corporation (China)
  • Itochu (Japan)
  • Plenary (Australia)
  • Samsung C&T (South Korea)
  • Vision Invest (Saudi Arabia)
  • WeBuild (Italy)

  The project client and its consultants held a consortium match-making event for prospective contractors and sponsors or investors in Dubai on 7 October.

  MEED previously reported that the bidders for the six PPP packages would be prequalified consortiums comprised of sponsors or investors; EPC contractors; and operations and maintenance contractors.

  The overall project will require a capital expenditure of about AED30bn ($8bn), while the whole-life cost over the full concession terms of the entire project is estimated to reach AED80bn.

  The investor prequalification process for the scheme comes after the client prequalified EPC contractors that can partner with the developers or investors to bid for the contracts.

  MEED understands that packages J1 and W will be tendered together as separate contracts first, followed by J2 and J3, with the requests for proposals to be issued sequentially, staggered about six to 12 months apart.

  Dubai Municipality is expected to invite prequalified companies to submit bids for the contracts to develop the first two packages of the DSST project in the fourth quarter of 2024.

  DSST packages

  Under the current plan, the $22bn DSST project is broken down into six packages, which will be tendered as PPP packages with concession periods lasting between 25 and 35 years.

  The first package, J1, comprises Jebel Ali tunnels (North) and terminal pump stations (TPS). The tunnels will extend approximately 42 kilometres (km), and the links will extend 10km. 

  The second package, J2, covers the southern section of the Jebel Ali tunnels, which will extend 16km and have a link stretching 46km.

  W for Warsan, the third package, comprises 16km of tunnels, TPS and 46km of links.

  J3, the fourth package, comprises 129km of links.

  J1, J2, W and J3 will comprise the deep sewerage tunnels, links and TPS (TLT) components of the overall project.

  J1, J2 and W will be procured under a design-build-finance-operate-maintain model with a concession period of 25-35 years.

  J3 will be procured under a design-build-finance model with a concession period of 25-35 years. Once completed, Dubai Municipality will operate J3, unlike the first three packages, which are planned to be operated and maintained by the winning PPP contractors.  

  The project’s remaining two packages entail expanding and upgrading the Jebel Ali and Warsan sewage treatment plants.

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  Jennifer Aguinaldo
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  Chinese firm wins facade work on world’s tallest tower

  30 October 2024

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  Saudi Binladin Group (SBG) has awarded Beijing-headquartered Jangho Group a facade works contract on what will be the world’s tallest tower – the 1,000-metre-plus Jeddah Tower in Saudi Arabia.

  Jangho Group will provide engineering design and technical services for the project’s structural glass and adhesive curtain walls.

  The announcement comes after the client, Jeddah Economic Company (JEC), signed an estimated SR8bn ($2.1bn) contract with SBG to resume construction work on the project.

  When completed, Jeddah Tower will be more than 172 metres taller than the 828-metre-tall Burj Khalifa, the world’s tallest building since 2009.

  Jeddah Tower’s superstructure is about one-third complete, with 63 floors out of a total of 157. SBG was the main contractor on the project in the early and mid-2010s. Germany’s Bauer completed the tower’s piling work.

  The architect is US-based Adrian Smith & Gordon Gill, and the engineering consultant is Lebanon’s Dar Al-Handasah (Shair & Partners).

  Jeddah Tower is the centrepiece of the Jeddah Economic City development. The project’s first phase, which includes the main tower, covers an area of 1.5 million square metres.

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  Yasir Iqbal
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  TotalEnergies $11bn hydrogen project starts pre-feed

  30 October 2024

  

   

  France’s TotalEnergies has started the pre-front-end engineering and design (feed) for its planned $11bn integrated project to produce green hydrogen and ammonia in Morocco, according to a company spokesperson.

  TotalEnergies signed the joint development agreement with the relevant authorities and ministers in Morocco on 28 October, during French President Emmanuel Macron’s visit to the North African state.

  It was previously reported that the planned integrated facility would be located in Guelmim-Oued Noun in southern Morocco.

  TotalEnergies’ chairman and CEO, Patrick Pouyanne, signed the agreement for the local production of green hydrogen and ammonia in the presence of Morocco’s King Mohammed VI and Macron.

  The counterparties included Morocco’s Energy Minister, Leila Benali; Economy and Finance Minister, Nadia Fattah; Interior Minister, Abdelouafi Laftit; and Minister Delegate in charge of Investment, Karim Zidane.

  It is understood that the project will require the development of 10GW of solar and wind energy and a land area of 187,000 hectares.

  It was reported that Morocco’s Unified Regional Investment Commission had approved the project’s launch in November 2022.

  The other agreements signed during Macron’s visit to Morocco cover financial cooperation in the rail, forestry, aviation, logistics and energy sectors, with a particular focus on decarbonisation and energy transition.

  TotalEnergies has been exploring green hydrogen and other related projects in the Middle East and North Africa region.

  In August, the Courbevoie-headquartered firm and Abu Dhabi Future Energy Company (Masdar) signed an agreement to assess the viability of developing a commercial green hydrogen-to-methanol-to-sustainable aviation fuel (saf) project.

  It is also among the early investors in UK-based Xlinks First, which aims to deliver the $18bn Morocco-UK power interconnector project. TotalEnergies acquired a minority stake in the company following an investment of $25.4m announced in November last year.

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  Jennifer Aguinaldo