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• 
  Market snapshot of Mena data centre projects

  29 April 2024

  

  Key points: 

  > HISTORICAL CONTRACTS: 2022 was the strongest year of the decade for data centre projects in the Middle East and North Africa (Mena). Since 2014, $2.8bn of data centre contracts have been awarded in the Mena region. The UAE has the largest value of data centre projects awarded over the past decade.

  > SUSTAINABILITY CHALLENGES: Key challenges include substantial power consumption of data centre facilities; Extensive water usage for server cooling (both directly and indirectly through electricity generation); Escalating need for land.

  > FUTURE CONTRACTS: Global data traffic is expected to rise substantially over the next decade, driven by rising incomes and technological advancement. There are $948m-worth of planned and unawarded data centre projects in the GCC.

  > TOP PROJECT OWNERS: The top data centre project spender based on projects planned and under way is Khazna Data Centres, with $790m-worth of projects.

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  MEED Editorial
• 
  Construction step change boosts order books

  29 April 2024

  Using data from regional projects tracker MEED Projects, the region’s most active contractor is Nesma & Partners, with $14.7bn of work at the execution stage. In 2023, the Saudi Arabia-based contractor topped the ranking with $5.3bn of work in execution, a total that would not even make the top 10 this year. Dubai-based Alec ranks 10th this year with $6bn of work under execution.

  Five Saudi-based contractors are in the top 10, reflecting the volume of construction work under way in the kingdom. Four of them are the contractors that the Public Investment Fund (PIF) invested in – Al Bawani, Almabani, El Seif and Nesma. The other is Shibh Al Jazira Contracting. 

  Two UAE-based companies, Trojan General Contracting and Alec, are in the top 10. While not as active as Saudi Arabia, the UAE market remains a crucial construction market, even though it is increasingly dominated by contractors with government or government-related shareholders.

  The other three contractors are Turkiye’s Limak, which is working extensively in Kuwait; Italy’s Webuild, which has won a series of major orders in Saudi Arabia in the past three years; and Beijing-based China State Construction Engineering Corporation (CSCEC), which works across the GCC and is the world’s third most active contractor, according to GlobalData’s ranking of global construction companies.

  Volume of work

  With a clear shift in the volume of work being undertaken, only five of the companies from 2023 remain in the top 10 this year. They are Nesma, Limak, Almabani, Webuild and CSCEC. Dropping out the top 10 are Saudi Arabia’s Alfanar Construction, Saudi Binladin Group – which was consistently the region’s most active contractor for many years – India’s Shapooorji Pallonji, Beijing-based China Harbour Engineering Corporation and Saudi Arabian Baytur. 

  With large contracts still being tendered in Saudi Arabia, it is likely that there will also be significant changes to next year’s ranking. The four contractors that the PIF invested in will likely continue to dominate, while other players will also look to take advantage of the work available in the kingdom and move up the rankings.

  With large contracts still being tendered in Saudi Arabia, it is likely that there will also be significant changes to next year’s ranking

  This will include other local players, as Shibh Al Jazira has demonstrated in 2024, and international companies that are looking to build their order books – just as Webuild has done in recent years. 

  As contractors pick up more work, there are nascent concerns that you can have too much of a good thing. Companies that grow rapidly become more difficult to manage and experience has shown that when markets correct, organisations that tempered their ambitions are more manageable and resilient, and are the ones more likely to survive.

  Bahrain

  Bahrain’s contractor ranking has remained largely static this year. The top two contractors have not changed and only one company has joined the top 10 this year.

  China Machinery Engineering Corporation maintains its lead position with $698m of work in the execution phase, thanks to its contract to build the East Sitra development for the housing ministry. Al Hamad Building Contracting is in second place, with $560m-worth of projects in the execution phase. 

  Nass Contracting is in third place, having moved up from fifth last year. Kooheji Contractor, which was ranked third last year, is now fourth. 

  The rest of the ranking remains largely the same, with Saleh Abdullah Al Muhanna & Partners replacing Al Taitoon Contracting in the top 10.

  The relative lack of change to the Bahraini ranking reflects the quiet market conditions in the country when compared to the larger GCC markets. 

  This is largely due to major projects such as the new terminal building at Bahrain International airport having been completed and tendering and contract awards not yet having started for major new projects, including the first phase of the Bahrain metro network and the second causeway connecting to Saudi Arabia. 

  Kuwait

  Turkiye’s Limak Holding has strengthened its position at the top of Kuwait’s ranking this year. The contractor has $5.6bn of construction work at the execution stage, according to MEED Projects. This is about $600m more than the $5bn it had when it headed the 2023 ranking. 

  Limak’s work in execution was boosted last year when the Public Works Ministry awarded it more construction work at Kuwait International airport. It secured a contract for package three of the expansion of Terminal 2, which covers the construction of aircraft parking aprons, taxiways and service buildings.

  In joint second place is Shapoorji Pallonji with $1.4bn of work at the execution stage. The Indian contractor is working on two healthcare projects and one education scheme in a joint venture with the local Al Sager General Trading & Contracting, which is also working on $1.4bn of projects at the execution stage.

  The only other non-Kuwaiti contractor in the top 10 is China Gezhouba Group Corporation, which is in fourth place with $1.3bn of projects at the execution stage. Its largest project is the infrastructure works at South Saad Al Abdullah Residential City.

  Oman

  The local Galfar Engineering & Contracting remains at the top of the Oman ranking in 2024, with about $900m of construction and transport projects at the execution stage, according to MEED Projects. The contractor’s total is slightly less than the $1.1bn it recorded last year. 

  Several key changes have occurred in the Omani top 10 this year. Local contractor Saif Salim Essa Al Harasi & Company has moved into fourth place thanks to several major contract awards. 

  In December last year, it secured a $118m contract for the construction of a hospital, and in October it was awarded a design-and-build contract for a cultural complex. The cultural complex was won as part of a joint venture with Turkish contractor Sembol Construction, which has also moved into the top 10 in seventh position.

  Another contractor that has moved into Oman’s top 10 is China Communications Construction Company. In January, it secured a marine works contract at the Yiti Sustainable City project.

  Qatar

  Two contractors top the Qatar ranking in 2024 with $1.4bn of ongoing projects each. Turkish contractor TAV Construction and the local Midmac Contracting Company both lead, largely due to their ongoing work at Hamad International airport. 

  Closely behind, in third position, is the local Generic Engineering Technologies, which is working on several projects in Qatar, including the upgrade of the Lusail Formula 1 and MotoGP race circuit.

  Urbacon Trading & Contracting, which topped last year’s ranking with $1.8bn of projects at the execution stage, is in fifth place this year with $1.2bn of projects. The contractor has taken significant strides in the past year to win work in other markets, including Saudi Arabia.

  Saudi Arabia

  There has been a major shift in the level of construction activity undertaken by the 10 most active contractors in Saudi Arabia in 2024. 

  This year, the total value of projects undertaken by the top 10 contractors is $71.5bn, more than a 130% increase from the $31bn recorded by the top 10 in 2023.

  The local Nesma & Partners tops the Saudi ranking again this year with $14.7bn-worth of projects at the execution stage. The total, which is about 50% more than that of the second-ranked contractor, highlights Nesma’s leading position in the Saudi market, and the scale of the opportunities that the kingdom’s projects sector now offers. 

  In second position is Italy’s Webuild with just short of $10bn of projects at the execution stage. Earlier this year, it secured a $4.7bn contract to construct dams at the Trojena mountain resort in Neom, adding to other major orders at Neom and Diriyah. 

  The four contractors that received investment from the PIF in 2023 now occupy four out of the top six positions in the
  Saudi Ranking. They are Nesma, El Seif, Al Bawani and Almabani.

  UAE

  The UAE’s construction market has grown strongly over the past year, and this is reflected in the 2024 contractor ranking. Like Saudi Arabia, the top 10 UAE contractors have more than doubled the total value of projects they have at the execution stage. This year, the top 10 have $27.6bn of work, which is a 123% increase from the $12.4bn last year.

  The top-ranked contractor in the UAE this year is Trojan General Contracting, which is part of Alpha Dhabi. In April, Alpha Dhabi Holding agreed to sell a 49% stake in its construction subsidiary Alpha Dhabi Construction Holding (ADCH) to local investment firm ADQ. Trojan is part of ADCH.

  With $6.2bn of projects at the execution stage, Trojan is ahead of National Marine Dredging Company (NMDC), which has $3.1bn of work. NMDC topped last year’s ranking with $2.3bn of projects. 

  In third place is UK-headquartered Innovo, with $3bn of projects, followed by Dubai-based Alec with $2.6bn.

  Contractors need to grow quickly to maintain their rankings. Al Amry Transport & General Contracting has moved down to fifth place from fourth, even though it more than doubled the value of its projects at the execution stage. China State Construction Engineering Corporation has also dropped in the ranking, from third to sixth place, despite increasing its value of projects to $2.4bn from $1.6bn.

   

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  Colin Foreman
• 
  Gulf players secure future of LNG projects

  29 April 2024

  

   

  This package also includes: Region boosts LNG spending

  ---

  Offtake agreements are crucial for producers of liquefied natural gas (LNG) to be able to reap long-term returns from their projects. 

  Traditionally, LNG has primarily been traded on the spot market, which, while beneficial to buyers, has left sellers with little profit.

  In order to justify the investments that they have committed to making on large-scale output expansion projects, Gulf LNG producers have been striving to strike long-term sales and purchase agreements (SPAs) with key customers around the world. 

  Scores of such supply deals have been struck by regional LNG producers in recent years – primarily by QatarEnergy, Oman LNG and Abu Dhabi National Oil Company (Adnoc) as they look to secure sustained returns on their project capital expenditure.

  Gulf LNG producers have been striving to strike long-term SPAs with key customers around the world

  Qatar LNG supply deals

  Qatar started delivering LNG to China in September 2009 and is estimated to have supplied approximately 80 million tonnes of LNG to the country to date.

  Qatar has worked to boost geopolitical and commercial relations with China, which is the world’s second-largest economy and one of the biggest markets for LNG consumption. The key long-term LNG SPAs that QatarEnergy has secured from Chinese companies, particularly since 2021, are a result of those improving bilateral relations.

  In March 2021, QatarEnergy won a 10-year contract with China’s Sinopec to supply 2 million tonnes a year (t/y) of LNG, with deliveries commencing in January 2022.

  QatarEnergy then signed a long-term SPA with CNOOC Gas & Power Trading & Marketing, a subsidiary of China National Offshore Oil Corporation (CNOOC), in October 2021. The deal involves supplying 3.5 million t/y of LNG to CNOOC over 15 years, starting in January 2022.

  Following that, in December 2021, QatarEnergy secured SPAs with two Chinese companies for the supply of 2 million t/y – 1 million t/y each to Guangdong Energy Group Natural Gas Company and S&T International, for periods of 10 and 15 years, respectively.

  QatarEnergy also signed another SPA with Sinopec in November 2022 for the supply of 4 million t/y of LNG from the North Field East (NFE) project for 27 years.

  In June 2023, QatarEnergy secured two major LNG supply deals with state-owned China National Petroleum Corporation (CNPC). The first deal is an SPA with CNPC to supply 4 million t/y of LNG for 27 years. As part of the second agreement, QatarEnergy transferred a 5% stake in its NFE LNG project to CNPC, which is the equivalent of one NFE train with a capacity of 8 million t/y.

  More recently, the Qatari state energy enterprise signed a major agreement with Sinopec to supply 3 million t/y of LNG for a period of 27 years. The LNG cargoes are to be sourced from QatarEnergy’s North Field South project. Under the terms of the agreement, QatarEnergy will also transfer a 5% interest to Sinopec in a joint venture company that owns the equivalent of
  6 million t/y of LNG production capacity in the North Field South project.

  Oman grows customer base

  Oman LNG has enjoyed significant success in some of the world’s largest LNG markets, winning deals with major consumers in those countries. Most recently, in April, the majority state-owned company secured three SPAs with Turkiye’s Botas Petroleum, Shell International Trading Middle East – the regional trading subsidiary of Shell – and Japan’s Jera. 

  Under these agreements, Oman LNG will deliver 1 million t/y, 1.6 million t/y and 800,000 t/y of LNG to its three customers, respectively.

  In addition, as well as having achieved the final investment decision on the Marsa LNG project in the sultanate with France’s TotalEnergies, Oman LNG has also signed an SPA with the French energy major to supply 800,000 t/y of LNG for a period of 10 years, starting in 2025. 

  Adnoc vies for market share

  Adnoc has yet to award final contracts for engineering, procurement and construction works on its planned Ruwais LNG terminal project in Abu Dhabi. However, the company has already secured SPAs for the supply of LNG from the project in the future.

  In March, Adnoc signed a heads of agreement with Germany’s SEFE Securing Energy for Europe for the supply of LNG that will primarily be sourced from its planned LNG export terminal in Ruwais. Adnoc will deliver 1 million t/y of LNG to SEFE Marketing & Trading Singapore, a subsidiary of the Berlin-headquartered SEFE, for a period of 15 years.

  The agreement with SEFE is the second long-term LNG supply agreement from the Ruwais LNG project. It followed the signing of a 15-year agreement with China’s ENN Natural Gas, which was inked in December 2023. Adnoc’s deliveries to ENN are expected to start in 2028, upon commencement of the facility’s commercial operations. 

   Region boosts LNG spending

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  Indrajit Sen
• 
  Region boosts LNG spending

  29 April 2024

  

   

  This package also includes: Gulf players secure future of LNG projects 

  ---

  There has been a sharp rise in investment in projects aimed at expanding the production of liquefied natural gas (LNG) in the Gulf region since the start of this decade.

  A capital expenditure of close to $38bn has been made by Middle East and North Africa hydrocarbons producers in the past 10 years, mainly on projects to increase LNG output capacity, according to data from regional projects tracker MEED Projects.

  Almost three quarters of that spending has taken place in the past four years, and predominantly in the GCC.

  The rise in the importance of natural gas, and therefore LNG, as an energy transition fuel has led to strong growth in its demand worldwide. Global trade in LNG reached 404 million tonnes in 2023, up from 397 million tonnes in 2022, with tight supplies of LNG constraining growth, energy major Shell said in a recent report.

  Global LNG demand is expected to rise by more than 50% by 2040, as industrial coal-to-gas switching gathers pace in China and countries in south and southeast Asia use more LNG to support their economic growth.

  Gulf players are keen to cater to this growing demand and dominate the global supply market, fuelling a wave of investment in large-scale production-boosting projects and terminal construction schemes. 

  The total LNG production capacity of the GCC is expected to reach an estimated 200 million tonnes a year (t/y) by 2030, cementing the region’s position as the world’s largest LNG supplier.

  Taking the lead

  Qatar has been jostling with the US and Australia for the title of world’s largest LNG provider for many years. Each of these three producers have clinched the top spot at different points, only to be unseated by one of the others again.

  However, when its North Field LNG expansion starts to come online later in this decade, Qatar will be able to consolidate its position as the world’s largest producer and exporter of LNG in the long term.

  State enterprise QatarEnergy is understood to have spent almost $30bn on the two phases of the North Field LNG expansion programme, North Field East and North Field South, which will increase its LNG production capacity from 77.5 million t/y to 126 million t/y by 2028. Engineering, procurement and construction (EPC) works on the two projects are making progress.

  QatarEnergy awarded the main EPC contracts in 2021 for the North Field East project, which is projected to increase LNG output to 110 million t/y by 2025. The main $13bn EPC package, which covers engineering, procurement, construction and installation of four LNG trains with capacities of 8 million t/y, was awarded to a consortium of Japan’s Chiyoda Corporation and France’s Technip Energies in February 2021.

  QatarEnergy awarded the $10bn main EPC contract for the North Field South LNG project, covering two large LNG processing trains, to a consortium of Technip Energies and Lebanon-based Consolidated Contractors Company in May 2023.

  When fully commissioned, the first two phases of the North Field LNG expansion programme will contribute a total supply capacity of 48 million t/y to the global LNG market.

  And Doha is not stopping there. QatarEnergy announced a third phase of its North Field LNG expansion programme in February. To be called North Field West, the project will further increase QatarEnergy’s LNG production capacity to 142 million t/y when it is commissioned by 2030.

  The North Field West project will have an LNG production capacity of 16 million t/y, which is expected to be achieved through two 8 million t/y LNG processing trains, based on the two earlier phases of QatarEnergy’s LNG expansion programme. The new project will draw feedstock for LNG production from the western zone of Qatar’s North Field offshore gas reserve.

  Muscat moves up

  Oman has been supplying LNG to customers, mainly in Asia, for many years. Majority state-owned Oman LNG operates three gas liquefaction trains at its site in Qalhat, with a nameplate capacity of 10.4 million t/y. Due to debottlenecking, the company’s complex now has a production capacity of about 11.4 million t/y.

  France’s TotalEnergies has also committed to becoming a major LNG supplier in the sultanate. In partnership with state energy holding conglomerate OQ, TotalEnergies has achieved final investment decision on a major LNG bunkering and export terminal in Oman’s northern city of Sohar.

  TotalEnergies is leading the Marsa LNG joint venture, which is developing the Sohar LNG terminal project. Marsa LNG was formed in December 2021 by TotalEnergies and OQ, with the partners owning 80% and 20% stakes, respectively.

  Marsa LNG plans to develop an integrated facility consisting of upstream units that will draw natural gas feedstock from TotalEnergies’ hydrocarbons concessions in Oman, particularly from the sultanate’s Blocks 10 and 11. 

  The joint venture is also planning an LNG bunkering terminal and storage units located in Sohar port, and a solar photovoltaic plant to power the LNG terminal.

  The Marsa LNG terminal will have a single train with the capacity to process about 1 million t/y of natural gas into LNG. The bunkering terminal will mainly supply LNG as a marine fuel to vessels. Marsa LNG has selected France’s Technip Energies to perform EPC works on the estimated $1bn project.

  Adnoc’s ambitions

  Abu Dhabi National Oil Company (Adnoc) has historically been one of the GCC’s smaller LNG producers. Adnoc Group subsidiary Adnoc Gas operates three large gas processing trains on Das Island. 

  At its Das Island terminal, Adnoc Gas has an LNG liquefaction and export capacity of about 6 million t/y. The facility’s first and second trains were commissioned in the 1970s and have a total combined output capacity of 2.9 million t/y. The third train came into operation in the mid-1990s and has a capacity of 3.2 million t/y.

  The LNG production and export capability of Adnoc Gas will receive a major boost when a new greenfield terminal that it has committed to developing in Ruwais, Abu Dhabi, comes online before the end of this decade.

  The planned LNG export terminal in Ruwais will have the capacity to produce about 9.6 million t/y of LNG from two processing trains, each with a capacity of 4.8 million t/y. The facility will ship LNG mainly to key Asian markets, such as Pakistan, India, China, South Korea and Japan.

  In March, Adnoc Group announced that it had issued a limited notice to proceed to a consortium of contractors for early EPC works on the Ruwais LNG terminal project. 

  The limited notice to proceed was given to a consortium led by Technip Energies, consisting of Japan-based JGC Corporation and Abu Dhabi-owned NMDC Energy.

  The overall value of the export terminal project is estimated to be more than $5bn. Adnoc is expected to issue the full EPC contract award for the Ruwais project in June this year.

   Gulf players secure future of LNG projects 

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  Indrajit Sen
• 
  Saudi Arabia extends Jubail-Buraydah IWTP deadline

  29 April 2024

  Saudi Water Partnership Company (SWPC) has extended the tender closing date for a contract to develop and operate Saudi Arabia's second independent water transmission pipeline (IWTP) project, which links Jubail and Buraydah.

  The state water offtaker now expects to receive bids by the end of June, instead of 28 March, according to a source familiar with the project.

  The planned Jubail-Buraydah IWTP is a 603-kilometre (km) pipeline, which can transmit 650,000 cubic metres of water a day.

  It is larger than the Rayis-Rabigh IWTP project, which a consortium including the local Alkhorayef Water & Power Technologies Company will develop and operate at a cost of SR7.78bn ($2bn).

  SWPC issued the request for proposals for the Jubail-Buraydah IWTP scheme to the prequalified bidders in October last year.

  MEED reported in February that at least three consortiums are forming to bid for a contract to develop Saudi Arabia's second independent water transmission pipeline (IWTP) project, which links Jubail and Buraydah.

  According to industry sources, the consortiums that are being formed include:

  • Ajlan & Bros / Alkhorayef Water & Power Technologies (local)
  • Lamar Holding (local) / Sinohydro (China)
  • Vision Invest (Local) / Taqa (UAE)

  MEED understands discussions are ongoing among other prequalified bidders to either join the consortiums or form separate ones. 

  The state water offtaker qualified 22 companies to bid for the contract in April 2022. They were:

  • Abdulaziz Alajlan Sons Company for Commercial & Real Estate Investment (Ajlan & Bros)
  • Abdullah Ibrahim Al Sayegh & Sons
  • Abu Dhabi National Energy Company (Taqa)
  • AliShar Contracting Company
  • Alkhorayef Water & Power Technologies
  • Al Sharif Group for Contracting
  • Bin Omairah Contracting Company
  • China Gezhouba Group Overseas Investment Company 
  • China Harbour Engineering Company 
  • China Railway Construction Corporation (International)
  • China State Construction Engineering Corporation
  • CNIC Corporation
  • Cobra Instalaciones y Servicios
  • Gulf Investment Corporation
  • Lamar Holding
  • Marubeni Corporation
  • Mowah Company
  • Mutlaq Al Ghowairi Company for Contracting
  • Nesma Company
  • Norinco International Cooperation
  • SICIM
  • Vision International Investment Company

  The transaction advisory team for the client comprises US/India’s Synergy Consulting as financial adviser and the local Amer Al Amr and Germany’s Fichtner Consulting as legal and technical advisers, respectively.

  SWPC’s obligations under the water transfer agreement will be guaranteed by a credit support agreement entered into by the Finance Ministry on behalf of the Saudi government.

  The project is part of the kingdom’s National Water Strategy 2030, which aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90% of national urban supply to reduce reliance on non-renewable ground sources.

  SWPC’s Seven-Year Planning Statement calls for the development of eight IWTP projects by 2028.

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  Jennifer Aguinaldo