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• 
  Aramco turns attention to strategic projects Indrajit Sen

  12 September 2025

  

   

  In the second quarter of 2025, Saudi Aramco’s capital expenditure (capex) stood at $12.3bn, marking a marginal year-on-year increase of 1.46%. For the first half of the year, the company recorded capex of $24.85bn, up 9.5% compared to the same period last year.

  The company had earlier issued capital investment guidance of $52bn to $58bn for 2025, excluding approximately $4bn in project financing.

  Concerns grew in Saudi Arabia’s offshore oil and gas projects market earlier this year as engineering, procurement, construction and installation (EPCI) contract awards stalled.

  Aramco spent a record $5bn on offshore EPCI contracts in 2024 and was expected to surpass that in 2025. However, it awarded no Contract Release Purchase Orders (CRPOs) in the first half of the year, fuelling apprehension among contractors and suppliers.

  In July, Aramco dispelled speculation by awarding five tenders worth over $3bn. The CRPOs are numbers 150, 157, 158, 159 and 160, and involve EPCI work and infrastructure upgrades at the Abu Safah, Berri, Manifa, Marjan and Zuluf offshore oil fields.

  Aramco also awarded four additional CRPOs as part of a large-scale infrastructure expansion at the Zuluf offshore field. These are CRPOs 145, 146, 147 and 148, with a combined estimated value of nearly $6bn.

  With these contract awards, Aramco has nearly doubled its offshore capex this year compared to 2024, marking another year of robust upstream investment.

  Looking ahead, Aramco is evaluating bids received for seven key tenders in July and August.

  These tenders include CRPOs 154, 155 and 156, representing the next phase of infrastructure expansion at the Safaniya offshore oil field; CRPO 161, which covers the EPCI of four gas jackets at the Arabiyah, Hasbah and Karan fields; and CRPOs 162, 163 and 164, relating to the EPCI of key infrastructure at the Abu Safah, Berri, Karan, Marjan and Safaniya fields.

  Onshore projects advance

  In parallel with the Safaniya offshore expansion, Aramco is tendering a separate project to build onshore surface and processing facilities to handle additional volumes of oil and associated gas generated by the expanded offshore infrastructure.

  The scope of the Safaniya onshore facilities project has been divided into two main EPC packages: the first covering water treatment and injection units, and the second focused on produced water utilities. Contractors have been given deadlines of 24 October and 7 November to submit technical and commercial bids.

  Aramco is also understood to be close to awarding the main EPC contracts for the expansion of the Haradh gas-oil separation plant 3 (Gosp 3) in Saudi Arabia. Located within the Haradh hydrocarbons development in the Eastern Province, the project will increase output of the Arab Light crude grade from 300,000 barrels a day (b/d) to 420,000 b/d. It will also raise sour gas production to 32 million cubic feet a day (cf/d).

  Ramping up gas production

  In line with its goal of increasing gas production, Aramco is progressing its Jafurah unconventional gas programme. Situated in Saudi Arabia’s Eastern Province, the Jafurah Basin contains the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. The shale play spans approximately 17,000 square kilometres.

  The Jafurah programme is a cornerstone of Aramco’s long-term gas strategy, with total lifecycle investment expected to exceed $100bn. In February 2020, Aramco received a capex allocation of $110bn from the Saudi government to support the long-term phased development of the unconventional gas resource base.

  Aramco is estimated to have spent $25bn across the first three phases of Jafurah’s development. In November 2021, the company awarded $10bn in subsurface and EPC contracts for phase one of the programme.

  On 30 June 2024, Aramco awarded 16 contracts worth approximately $12.4bn for phase two. The scope includes the construction of gas compression facilities, associated pipelines and the expansion of the Jafurah gas plant – covering gas processing trains, utilities, sulphur handling and export infrastructure.

  In July 2024, a consortium of Spain’s Tecnicas Reunidas and China’s Sinopec was awarded a $2.24bn EPC contract by Aramco for phase three of the expansion.

  Phase four of the Jafurah expansion is estimated at $2.5bn. The scope includes EPC works for three gas compression plants, each with a capacity of 200 million cf/d. Bids were submitted in mid-January, remain valid through September, and are under evaluation, with a contract award expected in Q4 2025.

  Aramco is also tendering a major project to boost gas compression capacity at the Shedgum and Uthmaniya plants in the Eastern Province.

  The facilities currently receive approximately 870 million cf/d and 1.2 billion cf/d of Khuff raw gas, respectively. The project aims to increase compression and processing capacity and to construct new pipelines to enhance gas transport.

  Contractors are preparing bids for several EPC packages under the Shedgum and Uthmaniya gas compression project.

  ---

  MEED’s October 2025 special report on Saudi Arabia also includes:

  > ECONOMY: Riyadh looks to adjust investment approach
  > BANKING: New funding sources solve Saudi liquidity challenge
  > GAS: Saudi Arabia and Kuwait accelerate Dorra gas field development
  > POWER: Saudi Arabia accelerates power transformation
  > CONSTRUCTION: Saudi construction pivots from gigaprojects to events
  > TRANSPORT: Infrastructure takes centre stage in Saudi strategy

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  Indrajit Sen
• 
  Saudi Arabia accelerates power transformation Mark Dowdall

  11 September 2025

  

   

  It has been a busy year for Saudi Arabia’s power sector, which has recorded a steady flow of project activity in 2025, with contracts worth almost $16bn awarded to date.

  While the total is below the record levels of 2023 and 2024, the market is progressing forward with more bid evaluations and tenders under way. 

  By September, $15.9bn of contracts had been awarded across oil and gas, solar, wind, cable and substation projects. A further $10.4bn of developments are in bid evaluation and expected to be awarded in the near to medium term. More than $162bn of projects are also out to tender, dominated by nuclear and solar developments.

  SEC investment

  The outlook for the sector was reinforced on 8 September when Saudi Electricity Company (SEC) outlined plans to invest SR220bn ($58.7bn) in power projects between 2025 and 2030. 

  The programme, presented at the Future Projects Forum in Riyadh, includes SR135bn ($36bn) and SR85bn ($22.7bn) for transmission and distribution, respectively, and is part of long-term plans to meet growing electricity demand while improving grid efficiency and reliability.

  Reflecting the scale of the investment, SEC said its planned upgrades will cover 130 high-voltage substations, 135,000 MVA of capacity, 12,900 kilometres of overhead transmission lines and 1,100km of underground cables.

  Renewables push

  At the same time, the year’s biggest contract awards point clearly to positive momentum for renewables. In June, Acwa Power, Public Investment Fund (PIF)-owned Badeel and Saudi Aramco Power Company (Sapco) signed power purchase agreements worth $8.3bn with Saudi Power Procurement Company (SPPC). 

  The deals cover five solar photovoltaic (PV) plants totalling 12,000MW and two wind farms with a combined capacity of 3,000MW, together adding 15,000MW under the National Renewable Energy Programme (NREP). 

  Furthermore, the PIF is planning second- and third-phase extensions to five existing utility-scale solar plants. The independent power plant (IPP) projects will have a total capacity of 9GW. It is unclear when the PIF will award the five schemes, but official documents have stated the negotiation process for the directly-awarded concessions should start this year.

  In parallel, SPPC is moving ahead with a 700MW wind IPP project at Yanbu, valued at $1bn. A consortium led by Japanese utility developer and investor Marubeni Corporation recently awarded the main engineering, procurement and construction (EPC) contract to Chinese contractor Sepco 3.

  The project, situated in Medina Province, is the third such project tendered under the fourth round of Saudi Arabia’s NREP.

  Data breakdown

  A breakdown of contract data for the year confirms the shifting balance of investment. Solar power accounts for the largest share of contracts awarded so far this year, at $6.6bn, reflecting the government’s push to expand renewable generation capacity. Wind power follows with $3.9bn, underlining the emergence of utility-scale wind farms.

  Transmission and distribution also remain a core focus. Substation and control centre projects account for $3.8bn of the total, while overhead cable schemes add a further $2.2bn. These projects align with SEC’s wider transmission and distribution investment programme, which is set to transform grid capacity over the rest of the decade.

  By contrast, oil- and gas-fired power plants represent only $595m of contracts so far this year. However, it is worth noting that a significant number of these projects are already under way following more than $22bn-worth of contracts in 2024.

  Additionally, in August, a consortium of Kepco, SEC and Acwa Power achieved financial close for the 3,600MW Rumah 1 and Nairyah 1 IPP projects. Together, the schemes represent a total investment of about $4bn, with SPPC acting as the principal buyer responsible for tendering and power offtake.

  The PIF has ramped up investment plans this year, emerging as the dominant owner by value, despite owning relatively few projects. It secured $8.3bn across seven projects, a sharp rise from $3.2bn in 2024. 

  SEC continues to have the highest volume with 62 projects worth $5.8bn, led by two standalone developments at Dawadmi and Riyadh, each 500MW/2000MWh and worth about $600m.

  This also signals a growing emphasis on large-scale battery energy storage, with the local Alfanar Company awarded the contract from SEC’s subsidiary National Grid Saudi Arabia for five battery energy storage system facilities. These will have a total combined installed capacity of up to 2,500MW, equivalent to about 10,000 megawatt-hours (MWh).

  The PIF and SEC dominate procurement activity, while other entities have also played a key role in 2025. Saudi Aramco is planning an estimated $500m second expansion phase of the Jafurah independent steam and power plant project. South Korea-based Doosan Enerbility will develop the project, while Kepco was awarded the main EPC contract, with no bidding involved. Both firms continue to be involved in the first phase, with construction works set to be completed next year.

  The data points to a dual trend in the market. SEC continues to oversee the bulk of grid operations and delivery, while PIF is taking the lead on strategic, high-value investments. This division of roles reflects the kingdom’s wider strategy to modernise its power infrastructure while accelerating the energy transition.

  ---

  MEED’s October 2025 special report on Saudi Arabia also includes:

  > ECONOMY: Riyadh looks to adjust investment approach
  > BANKING: New funding sources solve Saudi liquidity challenge
  > GAS: Saudi Arabia and Kuwait accelerate Dorra gas field development
  > CONSTRUCTION: Saudi construction pivots from gigaprojects to events
  > TRANSPORT: Infrastructure takes centre stage in Saudi strategy

  https://image.digitalinsightresearch.in/uploads/NewsArticle/14649798/main.gif

  Mark Dowdall
• 
  Qatar tenders completion of 39km strategic trunk sewer Mark Dowdall

  11 September 2025

  Qatar’s Public Works Authority (Ashghal) has issued a tender for the completion of the remaining works on the strategic trunk sewer from Sheehaniya to the Doha North sewage treatment works (DN STW).

  The package also includes the first phase of a new sewage terminal pumping station at the DN STW site.

  The tender, numbered PWA/GTC/26/2025, has a bid submission deadline of 30 September.

  A tender bond of QR12m ($3.3m) is required, and tender documents are priced at QR45,000.

  The project will channel sewage across a 27,320-hectare area, making it one of Qatar’s largest sanitation infrastructure undertakings.

  Located in Al-Sheehaniya municipality, the sewage will be channelled through interceptor sewers into a new deep tunnel trunk sewer of about 39 kilometres in length, with diameters ranging from 600mm to 1,800mm.

  The infrastructure will serve villages, farms, army camps, camel stabling areas and a new residential development, the authority said.

  According to MEED Projects, Aljaber Engineering was previously awarded the main contract for the project in 2021, following a bid of $83.7m.

  Ashghal said the contractor completed about 15.7km of the sewer, but did not state why construction stopped.

  Sheehaniya Terminal Pumping Station​​​​​​​

  The new Sheehaniya Terminal Pumping Station will have a capacity of 1,200 litres a second and is designed to meet demand up to 2037.

  The first phase, included in this contract, will install four pumps with capacity to handle about 615 litres a second.

  Other works include rising mains, surge vessels, screening facilities, odour control systems and supporting buildings.

  Both the sewer works and the Sheehaniya pumping station are expected to take around three years to complete, followed by a year of maintenance.

  The project will also include testing and fixing any previously completed works six to nine months after construction begins.

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  Mark Dowdall
• 
  Riyadh looks to adjust investment approach Dominic Dudley

  11 September 2025

  

   

  Yasir Al-Rumayyan, governor of Saudi Arabia’s Public Investment Fund (PIF), is preparing to set out a new investment approach for the $1tn sovereign wealth fund he runs, telling an event in Washington on 8 September that “in the coming two months or so, we will set the new strategy for the PIF”.

  It will be a significant moment given the scale of the fund’s investments in the Saudi economy, which were worth some SR2.8tn ($747bn) at the end of last year.

  Al-Rumayyan described it as “a continuation from the original strategy”, but, as yet, has not provided any further details. The fact that the state-owned fund is planning to change or evolve could, however, be taken as an implicit acknowledgement that all is not going as planned for the government’s efforts to remodel the economy.

  There have been a number of other recent signs of trouble, not least for the PIF and the other stalwart of the economy, Saudi Aramco.

  The PIF’s recent annual report for 2024 showed a 19% rise in assets under management to SR3.4tn, but the fund also cut the valuation of its gigaprojects by 12%, amid well-documented problems at some of its key projects.

  On 5 August, Aramco meanwhile reported a 14% year-on-year fall in net profits for the first half of 2025 to $48.7bn, amid a 15% drop in average oil prices. Despite that, its dividend payments crept up by 4%, while its debts increased by 25% to $3bn. 

  Seen together, such developments point to some wider problems with the government’s Vision 2030 diversification strategy, launched in 2016. In recent years, the PIF has been steadily increasing its domestic investments – in large part because international investors have not been putting money into the Saudi economy at anywhere near the rate hoped. Changing that trend is a critical test for Riyadh, but is also more difficult to pull off at a time of lower oil prices.

  There have been a lot of changes in the business environment in a short period of time and it can take a bit of time to bed down and for people to get comfortable with that
  Toby Iles, Jadwa Investment

  The Ministry of Investment reported on 3 September that inward foreign direct investment (FDI) had grown by 24% last year to reach SR119bn ($31.7bn), but that is still a long way short of the annual target of $100bn by 2030.

  Amine Mati, the IMF’s mission chief for Saudi Arabia, said at an event hosted by the Arab Gulf States Institute in Washington on 4 September that “FDI is coming, it's still not the numbers that we would like to see”.

  The reforms brought in over recent years may yet help to turn this around, but it is taking longer than some in Riyadh might hope.

  “There have been a lot of changes in the business environment in a short period of time and it can take a bit of time to bed down and for people to get comfortable with that,” said Toby Iles, chief economist at Riyadh-based Jadwa Investment.

  “I think it's important to reserve a bit of judgement on the FDI numbers for now and, of course, to remember that that 2030 target is both very high and also the target for 2030, not for now.”

  Grounds for optimism

  There are nevertheless various more positive signs in the market. Inflation appears to be contained at around 2%, home ownership levels are rising and unemployment is at a record low, with youth and female unemployment rates halving over the past four years.

  Overall, the Saudi economy – like those of the rest of the GCC – has so far avoided being too badly affected by regional instability or the global trade tensions prompted by US President Donald Trump’s tariffs.

  This can be seen in the continued growth in non-oil activity. According to the latest IMF report on the Saudi economy, released in early August, non-oil GDP grew by 4.5% last year, driven by the retail, hospitality and construction sectors. Public and private sector investments in transport systems, supply chains and new industries from tourism to electric vehicles are helping to underpin economic activity.

  Opec+ production cuts caused a 4.4% decline in oil GDP last year and left overall growth at around 2%, but the voluntary cuts have been unwound and Saudi crude output is now rising. Mati pointed out that a 1 million b/d increase in production can offset a $10 drop in oil prices: “People always talk about oil price, but forget to talk about oil production.”

  The IMF’s short-term forecast is for GDP to grow by 3.6% this year and 3.9% in 2026, helped by robust domestic demand, including government-led projects, and higher oil production. Others are predicting slightly higher numbers. Naif Alghaith, chief economist at Riyad Bank, said: “We expect maybe it's a bit higher: maybe just slightly shy of 5%.”

  Economic activity is being supported by fairly robust public spending, which has not dipped in the way it has in previous periods of lower oil prices. The IMF expects the budget deficit to be around 4% of GDP this year, but Mati said “there’s no need to cut spending to get back to the deficit target”, with the reforms and adjustments already made likely being enough to stabilise the situation without further action, he said.

  Project spending is significantly down this year, but Dubai-based bank Emirates NBD has said spending on projects will remain a key driver of Saudi Arabia's economic growth. The country has around $443bn-worth of projects under execution, according to MEED Projects – with the majority of them in the power, construction and gas sectors, not in the PIF’s troubled gigaprojects portfolio. The country has a further $208bn-worth of project work in the prequalification and bidding phases and due for imminent award.

  For all the efforts to encourage more private sector, non-oil activity, the main factors that will govern the trajectory of the economy in the coming years remain oil prices and government spending.

  “The government's pretty mindful of striking this balance between pushing the economic transformation agenda and maintaining strong fiscal external metrics,” said Iles.

  “I think the speed of travel for the economy is a function of how that pans out, and obviously, the oil market is part of the determinant of where the speedometer ends up.”

  ---

  MEED’s October 2025 special report on Saudi Arabia also includes:

  > BANKING: New funding sources solve Saudi liquidity challenge
  > GAS: Saudi Arabia and Kuwait accelerate Dorra gas field development
  > CONSTRUCTION: Saudi construction pivots from gigaprojects to events
  > TRANSPORT: Infrastructure takes centre stage in Saudi strategy

  https://image.digitalinsightresearch.in/uploads/NewsArticle/14648442/main.gif

  Dominic Dudley
• 
  Qatar tenders Wadi Al-Banat infrastructure contract Yasir Iqbal

  11 September 2025

  

   

  Qatar’s Public Works Authority (Ashghal) has tendered a contract inviting firms to bid for the construction of roads and infrastructure in Wadi Al-Banat North zone 70.

  The tender was floated on 3 September with a bid submission date of 30 September.

  The contract duration is three years from the start of construction.

  The notice follows Ashghal’s awarding of two contracts worth QR3.5bn ($961m) for the operations and maintenance of two schemes in Qatar.

  The contracts were awarded to the local subsidiary of Waagner Biro, which is owned by French firm Egis.

  The first contract is worth QR2.6bn ($713m) and covers the operations and maintenance of strategic highways.

  The other contract, valued at QR898m ($246m), covers the operations and maintenance of intelligent transportation systems.

  Market overview

  After 2019, there was a consistent year-on-year decline in contract awards in Qatar’s construction and transport sectors. The total value of awards in that year was $13.5bn, but by 2023 it had fallen to just over $1.2bn.

  In 2024, the value of project contract awards increased to $1.7bn, bucking the downward trend in the market in the preceding four years.

  Of last year’s figure, the construction sector accounted for contract awards of over $1.2bn, while transport contract awards were about $200m.

  There are strategic projects worth more than $5bn in the bidding phase, and these are expected to provide renewed impetus to the construction and transportation market, presenting opportunities for contractors in the near term.

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  READ THE SEPTEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

  Doha’s Olympic bid; Kuwait’s progress on crucial reforms reinforces sentiment; Downstream petrochemicals investments take centre stage

  Distributed to senior decision-makers in the region and around the world, the September 2025 edition of MEED Business Review includes:

  > OLYMPICS: Qatar banks on infrastructure for Olympic bid > QATAR TOURISM: Olympics bid aims to extend tourism gains > CURRENT AFFAIRS: Syria charts post-war reconstruction course > INDUSTRY REPORT: Regional chemicals spending set to soar > DOWNSTREAM: Adnoc set to become a chemicals major > SAUDI STADIUMS: Stadiums become main event for Saudi construction > CONSTRUCTION: Middle East to be a growth leader for global construction > LEADERSHIP: Dubai’s sea-air logistics model powers resilient trade > LEGAL: Dubai’s new law aims to reshape construction > KUWAIT MARKET FOCUS: Kuwait’s political hiatus brings opportunity

  To see previous issues of MEED Business Review, please click here

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  Yasir Iqbal