Dubai construction needs major project launches

25 April 2023

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Damac launches new project in Dubai Business Bay

Dubai returns to the iconic with Candy towers project

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Bloom appoints contractor for Abu Dhabi project

> Firms seek to qualify for UAE-Oman rail works


 

Growing demand for property in Dubai combined with a resilient economy have brought winds of optimism to the emirate’s real estate market. At the same time, the government’s handling of Covid-19 and recent measures to improve the business environment have strengthened Dubai’s position as a safe haven.

Over the past year, there has been record demand for premium properties in the emirate, mostly driven by wealthy international buyers from markets such as Russia, India and Europe.

According to a recent report by Luxhabitat Sotheby’s International Realty, Dubai’s super-prime residential market enjoyed a strong start to 2023, with a 24.9 per cent increase in prices per square foot compared with the previous quarter.

The upswing has resulted in developers launching a number of new schemes. Projects announced in recent months include Al-Habtoor Group’s estimated AED9.5bn three residential developments; Shamal Holding’s Baccarat Hotel & Residences in Downtown DubaiDamac Bay by Cavalli.

In Jumeriah Lake Towers, Dubai Multicommodities Centre in partnership with Ellington Properties has launched the AED1.2bn high-rise mixed-use Upper House project, while in Meyan MAG Property Development is developing the AED3bn Keturah Reserve residential scheme.

New masterplans have been conceived too, including the estimated $5.4bn mixed-use Dubai South project announced by Azizi Developments in January 2023.

Dubai is also returning to what it is known for: eye-catching, iconic projects. Later this year, a joint venture of Dubai World Trade Centre and the UK’s Candy Capital is expected to announce a three-tower project billed as a super-prime real estate development in Dubai’s One Central commercial district. The UK firm is known for London’s One Hyde Park, one of the wealthiest property residences in the world.

Slow recovery

Yet a closer look at the number of awarded contracts in the construction and transport sector reveals that the market is still playing catch-up, despite the growing hype.

The value of contracts awarded increased only slightly from $6.8bn in 2021 to $8.42bn in 2022, according to data from regional projects tracker MEED Projects. This is still far off the pre-pandemic level of $13.6bn in 2019. It is also only a fraction of the value of awards in 2016 and 2017, when signed contracts totalled $24.68bn and $26.14bn, respectively.

The backdrop to the weaker value of recent awards is the dearth of major construction contract awards as the government cut spending on major infrastructure projects. This has led to the market being driven mainly by private real estate developers launching smaller projects.

A few exceptions stand out, including the $260m contract awarded in January to China State Construction Engineering Corporation to construct Damac’s Cavalli Casa tower. Moreover, there are clear signs that the trend is changing. 

In addition to these projects, there are several other large-scale projects in the works, such as the estimated $1.2bn Waldorf Astoria Hotel by Al-Habtoor Group and Nakheel’s revived Palm Jebel Ali project, for which $4.6bn in funding was secured in November 2022.

The Palm Jebel Ali is about three times larger than the Palm Jumeirah, and will significantly increase the amount of waterfront land available for development in Dubai.

The soon-to-be awarded MGM Resort, Bellagio and Aria Hotels development by local developer Wasl is estimated at $500m. The three hotel resorts will be constructed on a man-made island off the coast in the Umm Suqueim area. The scheme is expected to feature 1,400 hotel rooms and apartments, in addition to retail, food and beverage and entertainment options.

Transport awards

It is hoped that the award of major infrastructure contracts may also restart this year, with the upcoming extension to the Dubai Metro network. After being put on hold, the scheme moved to the design stage in 2022. 

The Blue Line project involves constructing more than 20 kilometres of new lines, about half of which are underground, in order to extend the existing Red and Green lines.

Dubai is also considering plans to restart the emirate’s largest construction project, the AED120bn ($33bn) expansion of Al-Maktoum International airport

The expansion was officially launched in 2014. It involves building the biggest airport in the world by 2050, with the capacity to handle 255 million passengers a year. An initial phase, which was due to be completed in 2030, will take the capacity to 130 million a year.

Tendering for work on the project stalled with the onset of the Covid-19 pandemic in early 2020.

The margins became negative in the sector, and we cannot compete with the local companies or the government-backed Chinese corporations

International contractor

Contractor sentiment

The sector’s incomplete recovery from the pandemic is confirmed by the net value of contract awards, calculated by subtracting the value of completed work from the value of awarded work. 

Since 2018, the value of awarded contracts has been smaller than the amount of completed work, meaning contractors have fewer upcoming jobs.

Under these circumstances, companies that specialise in major construction projects are looking to other markets. 

“The UAE market is too calm. There is not enough work for us,” a local contractor tells MEED. “We are looking to expand our activity to Saudi Arabia. The work is there now.”

Some international companies, having faced long payment delays or financial losses, have left the region. “The margins became negative in the sector, and we cannot compete with the local companies or the government-backed Chinese corporations,” said one international contractor.

As it stands, there are over $42bn of projects in the bid, design and study stages in Dubai, according to MEED Projects. 

If major projects, such as the Al-Maktoum airport expansion, move into construction, they will provide a major boost for Dubai’s construction and transport industry.


This month's special report on the UAE includes: 

> GOVERNMENT: Abu Dhabi strengthens its position at home

> ECONOMY: UAE economy steers clear of global woes

> BANKING: UAE lenders chart a route to growth

> UPSTREAM: Strategic Adnoc projects register notable progress

> DOWNSTREAM: Gas takes centre stage in Adnoc downstream expansion

> POWER: UAE power sector shapes up ahead of Cop28

> WATER: UAE begins massive reverse osmosis buildup

> CONSTRUCTION: Dubai construction needs major project launches

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Eva Levesque
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    Adnoc Onshore issued the expression of interest for the Rumaitha and Shanayel on-plot and off-plot facilities project in early December, with contractors submitting their responses later that month, MEED previously reported.

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    MEED reported in December that Adnoc Onshore had cancelled the engineering, procurement and construction management (EPCm) phase it launched in 2024 for the Northeast Bab on-plot and off-plot facilities project in favour of executing the scheme under a conventional EPC model.

    The operator awarded a contract to state-owned China Petroleum Engineering & Construction Corporation (CPECC) to carry out EPCm services for the Northeast Bab off-plot facilities package in October 2024. However, the contract was subsequently cancelled last year.

    Separately, Adnoc Onshore received bids during the second quarter of 2025 for the EPCm tender covering the Northeast Bab on-plot facilities package, but that procurement process was also later cancelled.

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    • Gas handling and export:
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      • Medium-pressure gas compression system
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    • Electrical, instrumentation and control, and safety: Electrical systems, instrumentation and control system (ICSS, F&G system, field instrumentation, HIPPS, etc.), substation and ITR room building, fire water system, etc.
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    Off-plot facilities:

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    • Modifications in existing clusters, including the addition or extension of manifolds, headers, additional pipelines with pig traps, ICSS/telecom extensions, chemical injection kids, etc.
    • Gathering and injection networks: Construction of new and modified oil gathering and water injection trunklines/laterals, pigging facilities (launchers/receivers), valve stations, block valves, corrosion protection and monitoring, and all associated equipment, etc.
    • Export gas pipelines and Adnoc Gas interface: Provision for export gas pipeline and facilities from Rumaitha central processing plant to new manifold station and from NMS to Adnoc Gas, including isolation/blowdown, etc.
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    The tendering exercise for the Rumaitha and Shanayel on-plot and off-plot facilities project is taking place as Adnoc Onshore continues to make progress with EPC works on another, similar project to build off-plot facilities at the Southeast cluster of oil fields in Abu Dhabi, which is also integral to Adnoc Group’s AiP5 campaign.

    The Southeast cluster comprises the Asab, Mender, Qusahwira, Sahil and Shah fields and accounts for approximately a third of Adnoc Onshore’s oil production capacity.

    MEED previously reported that Adnoc Onshore had awarded EPC works on the Southeast off-plot facilities project to state-owned China Petroleum Engineering & Construction Corporation (CPECC), with the value of the contract estimated to be around $1.2bn.

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    MEED also recently reported that CPECC awarded subcontracts on the Southeast off-plot facilities project, in its capacity as the main EPC contractor.

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    CPECC is also performing EPC works on the Southeast on-plot facilities project in a consortium with Greece-headquartered Archirodon. Adnoc Onshore awarded an estimated $1.5bn contract for that project to the consortium in December 2024, with EPC works scheduled for completion in 2027.

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  • Dubai extends bid deadline for sewerage tunnels Phase 2 Links

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    Dubai Municipality has extended the bid submission deadline for the Phase 2 Links package under the Dubai Strategic Sewerage Tunnels (DSST) public-private partnership (PPP) project.

    The Phase 2 Links package is the third package being tendered under the flagship DSST scheme. It was tendered in January and has a new bid submission deadline of 30 September. It had previously been extended to 31 August.

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    Bid preparations

    MEED also previously reported that at least two groups are preparing to bid for the Links package.

    According to a source, the first group comprises an EtihadWE-led consortium, alongside China Civil Engineering Construction Corporation (CCECC), National Marine Dredging Company (NMDC) and China Railway Construction Corporation 11th Bureau Group (CRCC 11) as EPC contractors. France’s Veolia would act as operator.

    MEED understands that Plenary Group will lead a second bidding consortium, while DeTech Contracting and Kalyon Construction (Turkey) are also preparing to bid for EPC works on the project, sources said.

    The three packages are being procured under 30-year design, build, finance, operate and maintain concession models.

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  • Larsen & Toubro announces EPC agreement with PDO

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    Indian contractor Larsen & Toubro (L&T) has announced that it has signed a six-year engineering, procurement and construction (EPC) framework agreement with Petroleum Development Oman (PDO).

    Under the agreement, L&T said its subsidiary, L&T Energy Hydrocarbon Onshore, has been selected as one of four EPC contractors to participate in PDO’s upcoming front-end engineering and design (feed) and EPC projects over the agreement period.

    MEED recently reported that Mumbai-headquartered L&T had become the fourth contractor to join the pool of EPC service providers created by PDO to facilitate the tendering and award of future greenfield and brownfield projects within its Block 6 concession in the sultanate.

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    L&T was previously expected to join these contractors in the initial round of framework agreement signings that took place on 19 July, but it later engaged in a final round of discussions with PDO over terms and conditions, sources previously told MEED.

    “L&T remains committed to supporting In-Country Value (ICV) development in Oman through opportunities for local suppliers, subcontractors and service providers, and the continued development of local capabilities,” the Bombay Stock Exchange-listed company said on 31 July.

    Separately, the Egyptian consortium of Enppi and Petrojet confirmed its EPC framework agreement with PDO, adding that its duration is six years.

    Contractors holding EPC framework agreements will be invited by PDO to participate in tenders for up to eight projects under the arrangement, which are estimated to have a combined value of up to $6bn.

    The framework pool of contractors will be structured similarly to the Long-Term Agreement pool of EPC service providers operated by Saudi Aramco for its offshore and onshore projects.

    MEED previously reported that contractors submitted proposals for the EPC framework structure by 27 April.

    Before that, PDO issued the tender for the proposed EPC framework agreement on 22 February, setting a deadline of 9 March for technical clarifications and a cut-off date of 11 March to confirm or decline participation, according to sources.

    MEED reported last year that PDO had issued a prequalification document on 17 April 2025, outlining its requirements, criteria, planned projects and other aspects of the EPC framework agreement. At that time, PDO aimed to appoint two tiers of contractors for two categories of projects, known as Wave 1 and Wave 2.

    PDO’s Wave 1 and Wave 2 projects are as follows:

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    The Raba hub project forms part of the Qarn Alam growth development in the northern area of the PDO concession. The strategy covers nearby fields, including Raba Infill and Raba East.

    Production from Raba Infill will be routed to the existing Raba gathering station (RGS), while output from Raba East will be directed to the proposed Raba hub station (RHS).

    Modifications to the RGS are planned to accommodate additional volumes from Raba Infill. An interconnection between the RGS and RHS is also proposed to enhance operational flexibility. The project is expected to unlock an estimated 176 million barrels of unconventional reserves and increase production by about 50,400 barrels a day (b/d) by 2029.

    Wadi Umairi development – Oil and gas

    Scope includes oil and gas processing facilities such as separators, storage tanks, water injection pumps, a gas sweetening unit, off-plot infrastructure and utilities.

    Rabab Harweel Integrated Project (RHIP) tranche 2 – Oil and gas

    The RHIP involves miscible gas injection at several fields and is divided into two tranches. Tranche 2, scheduled to come on stream from 2028, aims to expand oil production capacity and enhance gas injection.

    The scope also includes sustaining gas supply from the reservoir through the installation of a depletion compression facility and expansion of the off-plot gas network.

    Bout full-field development – Oil and gas

    Scope includes remote manifold stations (RMSs), a gathering station, multiport selector valves, water injection manifolds, separators, a hydrocyclone package, water injection pumps and utilities.

    Dulaima carbon dioxide-based enhanced oil recovery – Carbon capture, utilisation and storage 

    Scope includes a processing facility to handle incremental hydrocarbons and carbon dioxide (CO2) volumes, including CO2 recycle injection.

    Makarem development – Sour oil and gas

    Scope includes a gathering station, RMSs, water injection systems, manifolds, pumps, separators and utilities. It also involves a greenfield sour gas facility with gas sweetening and sulphur recovery units.

    Amal South-East Development South – Gas

    Hawqa Hasirah Development South – Gas

    PDO previously intended to tender a project to build a new facility to handle additional oil production at the Al-Ghubar field reservoir in the Ghaba salt basin of Qarn Alam under its framework structure with selected EPC contractors, but eventually tendered it separately.

    PDO is the operator of the Block 6 hydrocarbons concession in Oman, which is the sultanate’s largest and most prolific concession. Situated onshore and covering an area of 75,119 square kilometres, Block 6 contains 202 oil fields and 43 gas fields, with PDO producing a total of approximately 680,000 b/d of oil and condensates from those fields.

    The Omani government holds a 60% stake in PDO. The other shareholders are UK-based Shell (34%), France’s TotalEnergies (4%) and Thai state-owned PTTEP (2%).

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  • Client seeks fresh PMC bids for Dorra gas project

    31 July 2026

     

    Al-Khafji Joint Operations (KJO) has sought fresh proposals from engineering firms for a revised tender for project management consultancy (PMC) services for the multibillion-dollar Dorra gas field facilities development project.

    MEED has been reporting since last March on KJO’s efforts to advance a project to produce gas from the Dorra offshore field, located in Gulf waters in the Neutral Zone shared by Saudi Arabia and Kuwait.

    KJO, which is jointly owned by Aramco subsidiary Aramco Gulf Operations Company and KPC subsidiary Kuwait Gulf Oil Company, has divided the engineering, procurement and construction (EPC) scope of work for the Dorra field gas production project into four EPC packages – three offshore and one onshore.

    The tender’s broad scope involves providing PMC services for the EPC works for the Dorra gas facilities development project.

    KJO issued the tender for PMC services on 29 September last year, and engineering firms submitted bids on 19 January this year, MEED previously reported.

    In the months following bid submission, KJO held discussions with bidders on contract terms and pricing, sources said. The client ultimately decided to retender the PMC services contract with a revised scope of work.

    “The regional conflict in the first and second quarters, and Iran’s hostilities against Gulf states, made the future of the [Dorra gas] project uncertain,” one source said.

    “[For KJO], developing a gas field that lies in disputed waters with Iran seemed risky business at the time, and that explains the large part of the delay [in the PMC tendering process],” the source added.

    KJO has now set a bid submission deadline of 17 August for the revised PMC tender for the Dorra gas facilities development project, sources said.

    The following firms, among others, are understood to have been invited by KJO to bid for the revised PMC tender:

    • Fluor (US)
    • KBR (US)
    • Technip Energies (France)
    • Wood (UK)
    • Worley (Australia)

    In addition to these bidders, firms that submitted proposals in the first tender round on 19 January included Saudi Arabia/UAE-based Kent and Spain’s Tecnicas Reunidas.

    Dorra offshore and onshore facilities

    KJO, meanwhile, is moving forward with the EPC tendering exercise for the main Dorra gas field facilities project. 

    Indian contractor Larsen & Toubro Energy Hydrocarbon (L&TEH) has won package 1 of the Dorra facilities project, which covers the EPC of seven offshore jackets and the laying of intra-field pipelines. The contract is estimated to be worth between $140m and $150m, MEED reported last October.

    A consortium of Italian contractor Saipem and L&TEH is understood to have submitted the lowest bid for offshore packages 2A and 2B, MEED reported in March. The only other consortium said to have submitted bids for packages 2A and 2B comprises Abu Dhabi-based NMDC Energy and South Korea’s Hyundai Heavy Industries.

    The EPC scope of work for package 2A includes Dorra gas field wellhead topsides, flowlines and umbilicals. Package 2B involves the central gathering platform complex, export pipelines and cables.

    Tecnicas Reunidas is understood to have emerged as the lowest bidder for onshore package 3, sources previously told MEED. Package 3 covers the EPC of onshore gas processing facilities.

    Saudi Arabia and Kuwait have been pressing ahead with their plan to jointly produce 1 billion cubic feet a day of gas from the Dorra gas field.

    The two countries have been producing oil from the Neutral Zone – primarily from the onshore Wafra field and the offshore Khafji field – since at least the 1950s. With a growing need to increase natural gas production, they have been working to exploit the Dorra offshore field, understood to be the only gas field in the Neutral Zone.

    Discovered in 1965, the Dorra gas field is estimated to hold 20 trillion cubic metres of gas and 310 million barrels of oil.

    The Dorra facilities scheme is one of three multibillion-dollar projects launched by subsidiaries of Aramco and KPC to produce and process gas from the Dorra field that have advanced in the past few months.

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  • Saudi Arabia to localise desalination equipment production

    31 July 2026

    Saudi Water Authority (SWA) has announced plans to establish a factory in Saudi Arabia to manufacture energy recovery devices used to reduce power consumption at reverse-osmosis desalination plants.

    US-based Energy Recovery will operate the facility with a capacity to produce 2,000 devices a year. Production is scheduled to begin in the first quarter of 2027.

    SWA said the facility will be the first factory outside the US to manufacture the specialised equipment.

    Domestic demand in Saudi Arabia is estimated at 1,200 devices a year. About 40% of the factory’s production is expected to be supplied to markets in the GCC, Africa and Asia.

    Energy recovery devices improve the efficiency of desalination plants by recovering energy from the reverse-osmosis process, reducing power consumption and operating costs.

    SWA said local manufacturing will reduce dependence on imports, shorten supply times and improve the reliability of supply chains serving desalination plants.

    The authority estimates the market opportunity for the industry at more than SR547m ($146m). This includes about SR247m ($69.5m) in Saudi Arabia and SR300m ($80m) across the Middle East and North Africa.

    The project is expected to contribute about SR137m ($36.5m) to Saudi Arabia’s GDP by 2033. SWA expects localisation within the product’s value chain to exceed 80%.

    The project is also intended to support knowledge transfer and develop local capabilities in the manufacture of desalination technologies.

    SWA led efforts to establish the project in cooperation with Saudi Arabia’s Ministry of Investment, Ministry of Industry & Mineral Resources and Local Content & Government Procurement Authority.


    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

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    > MARKET FOCUS: Maghreb fortunes diverge
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