meed-logo

line1 line2 line3
SIGN IN / REGISTER

Region plans vital big grid connections

29 May 2023

 

The mantra “there will be no transition without transmission” dominated this year’s World Utility Congress, which was organised by Abu Dhabi National Energy Company (Taqa) and held in the UAE capital on 8-10 May.

“There will be no transition without interconnectivity with our neighbours. If we are not interconnected, we are not using the full capacity of our [electricity] network,” UAE Energy and Infrastructure Minister Suhail bin Mohamed al-Mazrouei said at the congress.

For the GCC states in particular, their ability to procure affordable and large-scale solar energy capacity, and the wide discrepancy in peak demands between the winter and summer months, which often results in substantial idle capacity, make it imperative to connect to other states or regions.

“Links to other GCC states and Central Asia will enable our electricity system to run more efficiently. Some have access to wind, others to solar or hydropower. We also have different peak hours,” Al-Mazrouei said. “We need to consider [these opportunities] and make the investments.”

Boosting transmission

In recent years, there has been a flurry of projects to build or enhance electricity transmission links within the GCC states, as well as with neighbouring countries such as Iraq and Jordan.

Contracts were awarded this year for the construction of overhead transmission lines connecting the GCC grid to Iraq via Kuwait, as well as a link between Iraq and Jordan.

Other projects in the early stages include a second connection between Saudi Arabia and Iraq, Saudi Arabia and the UAE, and the UAE and Oman.

Beyond the GCC, a $1.8bn electricity link between Saudi Arabia and Egypt is under construction. The project will facilitate the exchange of 3,000MW of electricity between the two countries through overhead transmission lines as well as high-voltage, direct current (HVDC) subsea cables.

The most ambitious plans include projects that will pipe electricity from Egypt, Tunisia and Morocco to European countries including Greece, Italy and the UK.

Some have access to wind, others to solar or hydropower. We also have different peak hours … we need to consider [these opportunities] and make the investments
UAE Energy and Infrastructure Minister Suhail bin Mohamed al-Mazrouie 

Shifting peaks

Energy security has spurred investments to interconnect electricity grids between national borders and time zones. The pace of development is reminiscent of the advent of data interconnectivity two decades earlier.

Grid interconnections are also critical for the integration and optimisation of renewable energy, according to Jessica Obeid, a partner at New Energy Consult.

“Grid interconnections enable efficient management and mitigations of stability challenges linked to the integration of variable renewable energy such as wind and solar into the grid,” she says.

These interconnections enable the deployment of renewable energy where land is vast and resources are abundant, to be dispatched in energy load centres.

More importantly, they reduce the curtailment of renewable energy systems through electricity exchange, balancing supply and demand at various periods.

UK startup Xlinks aims to connect Morocco to the UK via four HVDC subsea cables stretching 3,800 kilometres across the Atlantic. “Long distance interconnectors solve the intermittency of renewables as the sun is always shining or wind is always blowing elsewhere,” says Simon Morrish, Xlinks’ CEO. 

“The idea is to generate clean energy and then move it to meet demand, which is much more economic than relying solely on domestic capacity.”

Xlinks aims to generate 10.5GW through solar and wind farms in Guelmin Oued Noun and pipe about 40 per cent of that energy through subsea cables that will have to pass through Spain, Portugal and France. The UK will receive 3.6GW of clean, affordable energy – equivalent to 8 per cent of its electricity needs – by 2030.

Soaring data demand drives boom

Desertec’s long shadow

The scale of Xlinks’ ambition draws comparison with an earlier project, the Desertec Industrial Initiative (Dii), which launched in 2009, but ironically has yet to see the light of day.

Dii had planned to build renewable energy plants globally, including in Morocco, and supply up to 15 per cent of Europe’s power demand by 2050.

Xlinks’ proponents expect to succeed where Desertec failed, however. “Generation costs are more than 90 per cent lower than they were then, which makes the project economically – as well as politically – attractive,” Morrish says.

Xlinks’ point-to-point design with an exclusive energy supply for the UK is expected to eliminate challenges associated with trying to use third-party transmission networks.

Although the technologies are all mature, Morrish says iterations have led to a much lower levelised cost of transmission over these distances. There is also more expertise for the HVDC system beyond the original equipment manufacturers.

Average electricity prices in Europe have increased significantly over the past 10 years and power delivered from the Middle East and North Africa (Mena) region is competitive with other reliable low-carbon solutions, according to Morrish.

The existence of clear renewable targets in Europe could also benefit Xlinks’ project, as well as similar schemes, such as the EuroAfrica Interconnector, which aims to link Egypt to Cyprus and Greece, and the Elmed Mediterranean project that links Tunisia to Italy.

Morocco’s renewable energy leadership, which includes having implemented legislation designed to facilitate the export of renewable energy, is another positive factor.

“Previous projects have typically focused on the recipient jurisdiction, such as Europe, rather than understanding the drivers for the generation country,” says Morrish. “By focusing on the benefits to the Mena region, in this case Morocco, Xlinks has obtained support from both Morocco and the UK.”

The 13-year gap between Desertec and Xlinks has not necessarily changed the mindset of some industry players, who are just beginning to grasp the complexities involved in other decarbonisation technologies such as green hydrogen and carbon capture and storage.

“It is an excellent concept, but it will be exceptionally difficult, if not impossible, to execute given the high demand for HVDC cables, financing and political considerations,” says a Dubai-based contractor.

Unlike the more reasonably- structured interconnections between the GCC or Mena states, the scale and scope of Xlinks’ scheme and other similar projects will require export credit and multilateral development agency support in combination with project finance debt. Experts say this is critical, but not entirely unprecedented.

For instance, Taqa’s decision to contribute $31m in the startup’s early funding round, which also includes $6.2m from UK-headquartered Octopus Energy, appears to signify investor appetite for the project. The scheme is expected to boost foreign direct investment and create thousands of jobs in Morocco during its construction phase.

Electricity demand is increasing at alarming rates, in direct relation to the impact of climate change and the increases in temperatures, cooling and water demand, which reduces the available supply for exports
Jessica Obeid, New Energy Consult

Political undertones

In December 2022, Saudi Investment Minister Khalid al-Falih said the kingdom is keen to join an agreement between four countries to export clean electricity from Azerbaijan to Europe.

He was referring to an accord signed by Azerbaijan, Georgia, Romania and Hungary to build an undersea cable in the Black Sea transmitting energy from Caspian Sea wind farms to Europe.

The agreement involves a 1,100-kilometre, 1GW cable running from Azerbaijan to Romania. It is part of broader EU efforts to diversify energy resources away from Russia amid the Ukraine war.

This provides an alternative to Saudi Arabia’s grid expansion plans, and to the Saudi-Egypt link, as Egypt itself is involved in negotiations to link its electricity grid to Italy, Cyprus and Greece.

Beyond financing, there are other challenges for both intra-Mena and intercontinental grid connections.

An efficient electricity exchange market is necessary, notes Obeid. Another key issue is the unsustainable increase in demand in Mena states. 

Figure1: Saudi-Egypt interconnector route

“Electricity demand is rising alarmingly, in direct relation to the impact of climate change and the increases in temperatures, cooling and water demand, which reduces the available supply for exports,” she says.

Plans to interconnect with Iraq, which has been heavily reliant on Iran for energy imports, can also be tricky. “The incentive is mostly political. Many countries have expressed interest in connecting their grids to Iraq’s, but none of these projects have yet materialised,” says Obeid.

“Linking Iraq to the Saudi grid is bound to be more viable and cheaper for Iraq compared to alternative options such as electricity exports from Jordan. But that is pending a political decision and would get Saudi Arabia and the GCC political and economic influence in Iraq.” 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10842129/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Contractors submit revised bids for Dukhan field facilities upgrade

    6 October 2026

     

    Contractors have submitted revised proposals to QatarEnergy for a key tender to upgrade facilities at the Dukhan oil field in Qatar, about 80 kilometres west of Doha.

    Following the submission of the initial round of bids for the project on 9 August, QatarEnergy requested revised proposals from contractors, which they submitted by 27 September, sources told MEED.

    The following local contractors, among others, are understood to be bidding for the DPFU Phase 1B (Part 2) tender, according to information obtained by MEED Projects:

    • Doha Petroleum Construction Company (Dopet)
    • Galfar Al-Misnad Engineering & Contracting
    • Qatar Engineering & Construction Company (Q-con)

    QatarEnergy originally stipulated a bond validity of 150 days (until 23 December) and a bid validity of 120 days (until 23 November) for the project.

    The engineering, procurement, installation and commissioning scope covers upgrades to 56 oil manifolds, 108 gas-lift manifold slots, chemical injection systems and key pumping facilities, along with associated piping, instrumentation, control, electrical and civil works.

    The scope includes the demolition of obsolete equipment, degassing station enhancements, and full testing and handover. It also encompasses additional capacity enhancement works under Part 3, mainly the installation of new oil export and produced-water transfer pumps, along with supporting facility modifications.

    The project involves complex interfaces and shutdown-critical activities, requiring expertise in live-plant integration.

    QatarEnergy issued the tender for the DPFU Phase 1B (Part 2) project on 8 June and initially set a bid submission deadline of 26 July, later extending it to 9 August.

    Dukhan, Qatar’s first and only onshore oil field, was discovered in 1938, with oil production starting in 1939-40. The country currently produces about 1.8 million barrels a day (b/d) of crude, with the Dukhan field accounting for about 350,000 b/d.

    The Dukhan oil field covers about 80km by 8km and consists of four reservoirs: Khatiyah, Fahahil, Jaleha and Diyab. The first three are oil reservoirs. The more recently developed Diyab reservoir contains non-associated gas and is estimated to hold around 2 billion barrels of crude oil reserves. Diyab lies on Dukhan’s southern flank.

    ALSO READ: QatarEnergy selects contractors for offshore oil field expansion
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20306273/main5440.jpg
    Indrajit Sen
  • Dubai issues PMC tender for four stormwater projects

    6 October 2026

     

    Dubai Municipality has invited consultants to bid for a contract to provide construction supervision services for four stormwater projects.

    The bid submission deadline is 29 October.

    All four projects are part of the municipality’s Tasreef programme, intended to increase Dubai’s rainwater drainage capacity by 700% by 2033 and provide capacity for the emirate’s needs for the next 100 years.

    The tender for TF-06-S1 Supervision of Stormwater Drainage System Projects – Package 4 was issued on 6 October.

    The consultancy covers the following projects:

    • TF-06-C1: Construction of a stormwater pond connecting Al-Maktoum Airport and Dubai South
    • TF-06-C2: Construction of a stormwater drainage system connecting Al-Maktoum Airport and Dubai South
    • TF-07-C1: Construction of a stormwater drainage system on Sheikh Zayed Bin Hamdan Road connecting developers
    • TF-24-C1: Connecting developers’ areas to the stormwater networks in Dubailand 

    In documents seen by MEED, the municipality said it will require a dedicated supervision team for each project.

    The consultancy will cover construction supervision, including the deployment of resident engineers, civil engineers, inspectors, quantity surveyors, land surveyors and planning engineers. Mechanical engineers will also be required, along with health and safety personnel and NOC engineers, depending on the project. 

    TF-07-C1 is the same strategic stormwater drainage project that Dubai Municipality recently tendered for construction, with contractors preparing to submit bids on 22 October.

    The project covers more than 100 million square metres between Sheikh Mohammed Bin Zayed Road and Emirates Road, and from Expo Road to Dubailand.

    It will provide stormwater infrastructure and service connections for more than 20 private developers and Al-Yalayis 5, as well as supporting major roads in the Jebel Ali area. The construction scope includes a major gravity drainage system with pipeline diameters of up to 3,000mm.

    TF-24-C1 is one of three water infrastructure tenders issued by the municipality in August, as reported by MEED. The project will connect developers’ areas in Dubailand to the stormwater network. It includes 18 kilometres (km) of stormwater drainage pipelines with diameters of up to 1,800mm and 3.5km of gravity sewer pipelines with diameters of up to 1,000mm.

    Bidding for the engineering, procurement and construction contract was recently extended to 1 October, with Nael Construction & Contracting and Al-Nasr Contracting Company among those expected to make an offer for the project.

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

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20305174/main.jpg
    Mark Dowdall
  • Aramco nears contract award for Jafurah fifth expansion phase

    6 October 2026

     

    Saudi Aramco is believed to be close to awarding the main contract for a major project representing the fifth expansion phase of the Jafurah unconventional gas development programme in Saudi Arabia.

    The main scope of work for the fifth expansion phase of Jafurah involves the engineering, procurement and construction (EPC) of three gas compression plants at the gas basin in the kingdom’s Eastern Province. Each plant will be capable of processing up to 200 million cubic feet a day (cf/d).

    Indian contractor Larsen & Toubro Energy Hydrocarbon (L&TEH) is the favourite to win the main EPC contract, according to sources.

    “Negotiations between Aramco and L&T have reached an advanced stage and the [Indian] contractor is now in pole position to clinch the deal,” one source told MEED.

    MEED previously reported that China Petroleum Engineering & Construction Company (CPECC) was in a favourable position to secure the main EPC contract for the Jafurah fifth expansion phase, based on Aramco’s initial evaluation of proposals. The situation remained subject to change as Aramco negotiated with the project’s other bidders, MEED reported in August.

    Aramco set 19 July as the final deadline for proposals, and contractors submitted their bids by that date, MEED previously reported.

    ALSO READ: Aramco receives interest for major gas processing plant

    The Saudi energy giant is understood to have issued the main EPC tender for the project in the first quarter of this year.

    Aramco issued a solicitation of interest for the Jafurah fifth expansion phase in mid-November, with contractors submitting responses by 30 November, MEED previously reported.

    UK-headquartered Wood Group has carried out the front-end engineering and design for the project.

    The Jafurah basin is the largest liquid-rich shale gas play in the Middle East, spanning about 17,000 square kilometres. The reserve is estimated to contain 229 trillion cubic feet of gas and 75 billion stock-tank barrels of condensate.

    Aramco recently brought the greenfield Jafurah gas processing plant online, with a production capacity of 450 million cf/d, marking the commissioning of the first phase of its $100bn capital expenditure programme to produce gas from the unconventional resource base.

    The company previously stated that it expected to start gas production at Jafurah in 2025, with the intention of progressively ramping up to 2 billion cf/d of sales gas, 420 million cf/d of ethane and 630,000 barrels a day (b/d) of high-value liquids by 2030.

    Aramco has said that its unconventional gas programme, at peak production, is expected to generate electricity equivalent to displacing 500,000 b/d of oil.

    Jafurah gas development phases

    Alongside nearing an EPC contract award decision for the fifth expansion phase at Jafurah, MEED also recently reported that Aramco had completed the solicitation of interest process with contractors for the unconventional gas programme’s sixth phase.

    The main scope of work on the Jafurah sixth expansion phase is similar to the fifth phase, and involves the EPC of three gas compression plants at the giant gas reserve, each with an output capacity of 200 million cf/d.

    Aramco also kicked off EPC works on the Jafurah fourth expansion phase in the second quarter of the year.

    MEED reported in April that Aramco had selected Mumbai-headquartered L&TEH as the main contractor for the fourth phase, which sources estimate could be valued at about $1.5bn.

    The main scope of work on Jafurah’s fourth expansion phase involves the EPC of two gas compression trains at the gas basin. Each plant will be able to process up to 200 million cf/d.

    EPC work on the third phase of the Jafurah unconventional gas development programme is also advancing.

    In July 2024, Aramco issued a non-binding letter of intent to a consortium of Tecnicas Reunidas and Sinopec Group for the EPC contract for phase three. The contract is estimated at $2.24bn.

    The objective of the third expansion phase is similar to that of the fourth phase. The main scope of work involves the EPC of three gas compression plants, each with a capacity of 200 million cf/d.

    The third phase’s 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.

    The selection of contractors for the third expansion phase came within weeks of Aramco officially awarding EPC contracts for the second phase, which aims to raise the field’s processing potential to up to 2 billion cf/d of raw gas.

    Aramco awarded 16 contracts, worth a combined total of about $12.4bn, for the second expansion phase on 30 June 2024.

    The EPC scope of work for that project involves the construction of gas compression facilities and associated pipelines, and the expansion of the Jafurah gas plant, including the construction of gas processing trains, utilities, sulphur and export facilities, Aramco said in a statement.

    The main EPC packages of the Jafurah second expansion phase project, their estimated values and the selected contractors are:

    • Package 1 – gas processing plant and main process units – $2.9bn: Larsen & Toubro Energy Hydrocarbon (India)
    • Package 2 – utilities and offsites – $2.4bn: Hyundai Engineering (South Korea)
    • Package 3 – gas compression units – $1bn: Larsen & Toubro Energy Hydrocarbon
    • Riyas natural gas liquids (NGL) package 1 – NGL fractionation trains – $1bn: Tecnicas Reunidas / Refining & Chemical Engineering Group (part of China’s Sinopec Group)
    • Riyas NGL package 2 – utilities, storage and export facilities – $2.2bn: Tecnicas Reunidas/Refining & Chemical Engineering Group
    • Riyas NGL package 6 – site preparation works – $107m: Mofarreh Alharbi & Partners (Saudi Arabia)
    • Riyas NGL package 9 – temporary construction facilities – $80m: Mofarreh Alharbi & Partners

    Aramco kickstarted EPC works on the first phase of the programme in November 2021 by awarding $10bn-worth of subsurface and EPC contracts.

    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.

    The Jafurah programme is central to Aramco’s goal of increasing gas production capacity. The target has recently been raised to 80%, with 2021 as the baseline, up from 60%, to meet rising domestic and global demand. The company expects life-cycle investment in Jafurah to exceed $100bn.

    Aramco completed an $11bn lease-and-leaseback deal in late October 2025 for gas processing facilities at the Jafurah unconventional gas reserve with a consortium led by funds managed by Global Infrastructure Partners (GIP), part of US asset manager BlackRock.

    Under the transaction, a newly formed subsidiary, Jafurah Midstream Gas Company (JMGC), will lease development and usage rights to the Jafurah field gas processing plant and the Riyas natural gas liquids fractionation facility.

    After 20 years, JMGC will lease the assets back to Aramco. JMGC will collect a tariff payable by Aramco in exchange for granting Aramco the exclusive right to receive, process and treat raw gas from the Jafurah resource base.

    Aramco will hold a 51% majority stake in JMGC, while the GIP-led consortium will hold the remaining 49%. Investors participating in the GIP-led consortium include Hassana Investment Company, the Arab Energy Fund and Aberdeen Investcorp Infrastructure Partners, as well as other institutional investors from North and Southeast Asia and the Middle East.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20299556/main3638.jpg
    Indrajit Sen
  • Joint venture wins Riyadh data centre construction deal

    6 October 2026

     

    Register for MEED’s 14-day trial access 

    Egyptian contractor Hassan Allam Construction and India’s Sterling & Wilson have won an estimated SR750m ($200m) contract to build the first phase of a data centre project in Riyadh.

    The first phase will have an IT load capacity of 16.2MW, with overall capacity reaching 50MW in the second phase.

    The scope includes civil, architectural, and mechanical, electrical and plumbing (MEP) works, infrastructure works and other associated works.

    Upon completion of both phases, the facility will comprise one 5MW standard-density hall and four high-density halls, each rated at 11.2MW.

    Saudi Arabian artificial intelligence (AI) firm Humain and Center3 – the digital infrastructure subsidiary of local telecom company STC Group – are jointly developing the project.

    The first phase is scheduled to take 16 months.

    In December last year, Center3 and Humain partnered to develop and operate AI-focused data centres across Saudi Arabia, with a planned capacity of up to 1GW.

    The partners said the first phase will deliver up to 250MW of capacity, designed for high-density AI workloads and large-scale model training.

    The venture combines Center3’s data centre operations and regional connectivity with Humain’s full-stack AI capabilities, with the latter responsible for aligning facility design with advanced compute requirements and future architectures.

    The companies said the programme will deliver purpose-built facilities engineered for high power density, low latency and resilient operations, to support large language models and other mission-critical AI applications.

    They added that the initial schemes will serve as a template for subsequent rollouts as capacity scales towards the 1GW target.

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

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20298893/main.jpg
    Yasir Iqbal
  • Chevron signs Egypt oil and gas exploration deal

    6 October 2026

    State-owned Egyptian Natural Gas Holding Company (Egas) and US-headquartered Chevron have signed an agreement related to oil and gas exploration in Egypt’s offshore Lotus concession.

    Under the agreement, Chevron will invest at least $88m in exploration activities within the concession, according to a statement from Egypt’s Ministry of Petroleum & Mineral Resources.

    Chevron has agreed to drill two deepwater exploration wells and to reprocess 3D seismic data for the concession.

    Egypt’s Ministry of Petroleum & Mineral Resources said the agreement was part of the ministry’s “efforts to expand exploration activities and unlock new areas for petroleum investments”.

    It also said that the deal reflected Chevron’s “commitment to pumping new investments into exploration activities in Egypt”.

    In August, Egypt’s Minister of Petroleum and Mineral Resources, Karim Badawi, presented the ministry’s five-year production strategy, which aims to double Egypt’s oil and condensate output while strengthening the country’s position as a regional hub for petroleum product trading and gas liquefaction.

    Egypt has been working towards this goal by forging a range of new deals with international oil companies.

    Chevron has offshore exploration and development rights for several Egyptian concessions, including Nargis, North El-Dabaa, North West Atoll, North Simian and North Cleopatra, where it partners with Shell.

    In April, Egypt’s cabinet approved a draft version of the Lotus concession agreement between Egas and Chevron during a meeting chaired by Prime Minister Mostafa Madbouly.

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

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20298172/main.jpeg
    Wil Crisp