GCC leans towards battery energy storage
29 January 2024
The central tower of Noor Energy 1, the hybrid solar photovoltaic (PV) and concentrated solar power (CSP) fourth phase of the Mohammed bin Rashid Al Maktoum (MBR) Solar Park, is visible to motorists on the Saih Al Dahal Road on the outskirts of Dubai.
The 263-metre solar tower is part of the $4.3bn project that is touted as the largest CSP and thermal energy storage (TES) facility in the world.
It heats the salt stored in nearby tanks during the day to enable the production of energy at night.
Awarded in 2017 to a team led by Saudi utility developer Acwa Power, Noor Energy 1 will deliver electricity at a levelised tariff of $cents 7.30 a kilowatt-hour ($c/kWh), which Acwa Power says competes with fossil fuel-generated electricity without subsidy for reliable and dispatchable solar energy through the night.
Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, inaugurated the project in December.
The project’s higher levelised cost of energy (LCOE) compared to a plain solar PV plant accounts for the round-the-clock capability of the Noor Energy 1 plant to produce power.
The power-purchase agreement (PPA) for the project is for 35 years, which is 5-10 years longer than the average solar PPA in the Gulf region.
Competing technology
Six to seven years after the Noor Energy 1 contract was awarded, a competing technology addressing spinning reserve and intermittency when coupled with a renewable energy plant – battery energy storage – is gaining acceptance.
Lithium-ion batteries store excess energy produced during the day, which can then be discharged at night, providing grid stability that until recently has been supplied by gas-powered or liquid fuel-powered generation plants.
The cost of batteries is forecast to decline significantly over the next six years and beyond, although the LCOEs for solar or wind farms with storage capacity are still broadly considered significantly higher than those without.
Source: Lazard
According to the US-headquartered financial advisory firm Lazard, the average LCOE in an unsubsidised, utility-scale solar PV averaged between $24 and $96 a megawatt-hour (MWh) in 2023. In comparison, the added cost of lithium-ion batteries with four-hour storage capacity to a similar solar PV farm takes the LCOE to between $46 and $102/MWh.
Critical choices
Several CSP with TES (CSP+TES) projects have been awarded and completed in the Middle East and North Africa region. Kuwait and Abu Dhabi have built 50MW and 100MW CSP facilities, respectively, while Acwa Power has developed three CSP plants with a total combined capacity of 500MW in Morocco.
However, not many CSP+TES projects are forthcoming.
Saudi Arabia previously planned to procure a hybrid solar and CSP+TES project, but such a scheme is not included in the fifth and sixth procurement rounds of its National Renewable Energy Programme.
In 2019, Morocco awarded the contract for Noor Midelt 1, an 800MW solar CSP scheme, but it is understood that the project has yet to reach financial close and construction work has yet to start.
In comparison, half of the GCC states are planning to procure battery energy storage system projects using an independent power producer (IPP) model.
Saudi Arabia plans to procure 10GW of battery energy storage capacity, equivalent to 40 gigawatt-hours (GWh), by 2030. The procurement process is expected to start this year for the first phase, which will comprise a dozen sites with a total capacity of 2GW.
Abu Dhabi's Emirates Water & Electricity Company (Ewec) received expressions of interest from developers last year for its first 400MW battery energy storage project.
Oman, which does not plan to procure further gas-powered plants, is also considering a similar project.
"Broadly, battery energy storage solutions make more sense now than CSP+TES technology," a Dubai-based renewable energy expert tells MEED.
Others, however, remain convinced that there will continue to be a place for CSP+TES, especially in jurisdictions with plenty of barren and unused land. This is mainly due to the technology's ability to produce up to eight hours of energy, compared to an average of four hours offered by lithium-ion batteries.
The first utility-scale battery storage installation in the GCC is in Saudi Arabia. The 1,300MWh facility is designed to support the off-grid utility infrastructure of the Red Sea Project development. The smaller Amaala project will also feature a 700MWh battery storage capacity.
Neom Green Hydrogen Company has incorporated a 400MW battery facility as part of the more than 4GW renewable energy contract it awarded India's Larsen & Toubro last year. The infrastructure will support a 2GW electrolysis plant that will produce green hydrogen to be converted into ammonia for export to Europe.
However, some Middle East-based renewable energy developers remain cautious about the timeline and the scale of the planned battery storage independent power projects across the region.
"It is not clear if they have received an official mandate to proceed with the projects, but we are definitely interested in bidding," says a Dubai International Financial Centre-based executive from an international utility developer.
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Contractors submit bids for Saudi gas processing plant project
8 May 2026
Contractors have submitted bids to Saudi Aramco subsidiary Aramco Gulf Operations Company (AGOC) for a project to build an onshore gas processing plant in Saudi Arabia’s Khafji that will draw and process gas from the Dorra offshore gas field, located in waters of the Saudi-Kuwait Neutral Zone.
MEED previously reported that AGOC had divided the engineering, procurement and construction (EPC) on the Khafji gas plant project into seven packages, and issued the main tenders for those last year.
Contractors were initially set deadlines of 24 October for technical bid submissions and 9 November for commercial bids. AGOC later extended the bid submission deadline to 22 December, and then until 22 April. A final deadline of 30 April was set, with contractors submitting bids by that date, according to sources.
The seven EPC packages cover works including open-art and licensed process facilities, pipelines, industrial support infrastructure, site preparation, overhead transmission lines, power supply systems and main operational and administrative buildings, with their breakdown as follows:
- Package 1 – Open-art facilities
- Package 2 – Licensed facilities
- Package 3 – Industrial support facilities
- Package 4 – Pipelines
- Package 5 – Site preparation
- Package 6 – Overhead transmission lines plus power supply (from Saudi Electricity Company)
- Package 7 – Headquarters complex
Saudi Arabia and Kuwait have been pressing ahead with their plan to jointly produce 1 billion cubic feet a day (cf/d) 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 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 Khafji gas plant project is one of three multibillion-dollar projects launched by subsidiaries of Saudi Aramco and Kuwait Petroleum Corporation (KPC) to produce and process gas from the Dorra field that has advanced in recent months.
Dorra field facilities project
Al-Khafji Joint Operations (KJO), which is jointly owned by AGOC and KPC subsidiary Kuwait Gulf Oil Company (KGOC), has divided the scope of work on the Dorra field facilities project into four EPC packages – three offshore and one onshore.
India’s Larsen & Toubro Energy Hydrocarbon (L&TEH) won the contract for package one of the Dorra facilities project, which covers the EPC of seven offshore jackets and the laying of intra-field pipelines. The contract awarded by KJO to L&TEH is estimated to be valued at $140m-$150m, MEED reported in October.
Additionally, Italian, Indian and Spanish contractors have emerged as the lowest bidders for the other three EPC packages that form part of the Dorra facilities project.
A consortium of Italian contractor Saipem and L&TEH is understood to have submitted the lowest bid for offshore packages 2A and 2B, according to sources. The only other consortium understood 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.
Spanish contractor Tecnicas Reunidas is understood to have emerged as the lowest bidder for onshore package three, sources told MEED. Package three covers the EPC of onshore gas processing facilities.
KGOC onshore processing facilities
The third component of the overall Dorra gas field development programme is a planned onshore gas processing facility to be built in Kuwait, which has been undertaken by KGOC.
KGOC had been progressing with the front-end engineering and design (feed) work on the project, before the destabilising impact of the US-Israel conflict with Iran compelled the operator to put the project on hold, MEED reported in April.
The proposed facility, estimated to be worth $3.3bn, will receive gas from a pipeline from the Dorra offshore field, which is being separately developed by KJO. The complex will have the capacity to process up to 632 million cf/d of gas and 88.9 million barrels a day of condensates from the Dorra field.
The facility will be located near the Al-Zour refinery, owned by another KPC subsidiary, Kuwait Integrated Petroleum Industries Company.
A 700,000-square-metre plot has been allocated next to the Al-Zour refinery for the gas processing facility and discussions regarding survey work are ongoing. The site could require shoring, backfilling and dewatering.
The onshore gas processing plant will also supply surplus gas to KPC’s upstream business, Kuwait Oil Company, for possible injection into its oil fields.
Additionally, KGOC plans to award licensed technology contracts to US-based Honeywell UOP and Shell subsidiary Shell Catalysts & Technologies for the plant’s acid gas removal unit and sulphur recovery unit, respectively.
France-based Technip Energies has carried out a concept study and feed work on the entire Dorra gas field development programme.
Progress has been hampered by a dispute over ownership of the Dorra gas field. Iran, which refers to the field as Arash, claims it partially extends into Iranian territory and asserts that Tehran should be a stakeholder in its development. Kuwait and Saudi Arabia maintain that the field lies entirely within their jointly administered Neutral Zone – also known as the Divided Zone – and that Iran has no legal basis for its claim.
In February 2024, Kuwait and Saudi Arabia reiterated their claim to the Dorra field in a joint statement issued during an official meeting in Riyadh between Kuwaiti Emir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah and Saudi Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.
Since that show of strength and unity, projects to produce and process gas from the Dorra field have gained momentum.
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Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
> REGIONAL LNG: War undermines business case for Middle East LNG> CAPITAL MARKETS: Damage avoidance frames debt issuance> MARKET FOCUS: Conflict tests UAE diversificationTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16734353/main5834.jpg -
Teams prepare bids for Riyadh East sewage treatment plant
8 May 2026
At least six consortiums are preparing to submit bids for Saudi Arabia's Riyadh East independent sewage treatment plant (ISTP) project, according to sources.
The project will be developed under a build‑own‑operate‑transfer model with a 25‑year concession term.
The plant will have a treatment capacity of 200,000 cubic metres a day (cm/d) in its first phase, expanding to 500,000 cm/d in the second phase.
MEED understands that the following consortiums are in discussions to submit bids for the project, which has a recently extended bid submission deadline of 30 June:
- Suez (France) / Civil Works Company (Saudi Arabia) / Alwael (Saudi Arabia)
- Saur (France) / Samsung E&A (South Korea) / Al-Bawani (Saudi Arabia) / Nesma (Saudi Arabia)
- Alkhorayef (Saudi Arabia) / GS Inima (Spain)
- EtihadWE (UAE) / Metito (UAE)
- Veolia (France) / AlJomaih Energy & Water (Saudi Arabia)
- Miahona (Saudi Arabia) / Marafiq (Saudi Arabia)
In December 2025, a group comprising Metito, EtihadWE and SkyBridge was selected as the preferred bidder for the Hadda ISTP project. Miahona, Marafiq Company and Buhur for Investment was selected as the reserved bidder.
That same month, the Miahona-led consortium was selected as preferred bidder for the Arana ISTP and the Metito-led consortium was selected as the reserved bidder. Both projects have yet to reach financial close.
The Riyadh East, Hadda and Arana ISTPs are being undertaken by state water offtaker Sharakat, formerly Saudi Water Partnership Company, in collaboration with the National Centre for Privatisation & PPP.
In 2024, Sharakat prequalified 53 companies that could bid for the Riyadh East ISTP, part of seven planned ISTP projects it said it would procure between 2024 and 2026. The request for proposals was issued last October.
WSP is the technical adviser and KPMG Middle East is the lead and financial adviser on the project.
The targeted commercial operation date for the facility is 2029.
ISTP plans
According to Sharakat’s recent seven-year statement, it has identified six additional large ISTPs in the development pipeline.
These are:
- Kharj (75,000 cm/d)
- Abu Arish (50,000 cm/d)
- Hafar Al-Batin (100,000 cm/d)
- Riyadh North (TBD)
- Najran South (50,000 cm/d)
- Khamis Mushait (50,000 cm/d)
The company is also pursuing a nationwide small sewage treatment plant programme covering about 139 smaller ISTPs grouped into seven clusters.
These are designed to add about 521,450 cm/d of additional treatment capacity across the kingdom.
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Saudi Arabia tenders Jeddah-Mecca highway PPP
8 May 2026
Saudi Arabia’s Roads General Authority (RGA) and the National Centre for Privatisation & PPP (NCP) have tendered the contract for the development of the Jeddah-Mecca highway project.
The tender was issued on 19 April, with a bid submission deadline of 19 August.
The scope of the tender is split into two sections: development of motor service areas (MSA) and highway services.
Under the MSA component, the company will develop, permit, finance, design, engineer, procure, construct, complete, test, commission, insure, operate and maintain three MSAs along the highway.
The contract term is 25 years, including two years of the construction period.
Each MSA plot will cover 34,500 square metres and will include facilities such as fuel stations, electric vehicle charging, truck services, tyre and oil change, car wash and repair, retail and food outlets, ATMs, restrooms, mosques, parking, landscaping and other associated utilities.
The highway services component will include insurance, operation and maintenance of highway assets for 10 years.
The 64-kilometre (km) Jeddah-Mecca highway has four lanes in each direction. The construction works on 51km are complete, while the rest is under construction and scheduled for completion in 2027.
In March, the RGA and NCP prequalified three bidders to develop the project. These were:
- Algihaz Holding / ICA Construction (local/Turkiye)
- Lamar Holding / Shaanxi Construction Engineering Group Corporation (Bahrain/China)
- Mada International Holding (local)
The expression of interest notice for the project was first issued in October 2024, as MEED reported.
The project is one of four planned highway schemes in the kingdom’s privatisation and public-private partnership (P&PPP) pipeline.
READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDFGlobal energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.
Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
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US sanctions Iraq’s deputy oil minister
8 May 2026
The US has sanctioned Iraq’s Deputy Oil Minister Ali Maarij Al-Bahadly, in another blow for the country’s oil and gas sector.
In a statement released by the US Treasury, it said that he “abuses his position to facilitate the diversion of oil to be sold for the benefit of the Iranian regime and its proxy militias in Iraq”.
The US Department of the Treasury’s Office of Foreign Assets Control (Ofac) has also designated three senior leaders of the militias Kata’ib Sayyid Al-Shuhada and Asa’ib Ahl Al-Haq.
In its statement, it said that the US will continue to hold these groups and other militias in Iraq, such as Kata’ib Hizballah, accountable for their attacks against US personnel and civilians, diplomatic facilities and businesses across Iraq.
Secretary of the Treasury, Scott Bessent, said: “Like a rogue gang, the Iranian regime is pillaging resources that rightfully belong to the Iraqi people.”
He added: “Treasury will not stand idly by as Iran's military exploits Iraqi oil to fund terrorism against the United States and our partners.”
Ofac said that it designated Iraq’s deputy minister of oil on 7 May because he had been “instrumental in facilitating the diversion of Iraqi oil products to benefit known Iran-affiliated oil smuggler Salim Ahmed Said, as well as Iran-backed terrorist militia Asa’ib Ahl Al-Haq (AAH)”.
It added: “For years, Maarij has used his official positions, first as the head of the Iraqi parliament’s oil and gas committee, and then within the Iraq Ministry of Oil, to enrich Said, AAH, and by extension, Iran.”
The US Treasury said that it designated Said in June 2025 for running a network of companies selling Iranian oil falsely declared as Iraqi oil to avoid sanctions.
In its statement, it said: “Integral to this operation was Said’s ability to obtain favoured access to Iraqi oil and procure forged documentation from Iraqi government officials, legitimising illicit oil.
“To that end, Said was responsible for bribing complicit officials in the Iraqi government, as well as reportedly installing Maarij in his official position.”
Since 2018, Maarij has held several positions in Iraq’s Oil Ministry, including head of the licensing and contracts office, deputy minister, and acting oil minister.
The US Treasury said that, in his official capacities, Maarij enabled Said to illicitly procure oil products by granting exportation rights to Said’s companies.
It claimed that Maarij authorised trucking several million dollars’ worth of oil a day from the Qayarah oil field to VS Oil Terminal in Khor Zubayr for export.
The US sanctioned VS Oil Terminal in July last year.
The US Treasury said that VS Oil oversaw the mixing of Iranian oil with Iraqi oil before being shipped to market.
It also said that Maarij is also responsible for falsifying documentation on the provenance of oil for Said’s network, enabling it to be smuggled to market disguised as purely Iraqi oil.
Neither Iraq nor Iran has responded to the announcement of the new sanctions.
The sanctions were announced as the US and Iran battle over control of the Strait of Hormuz, which has seen significant disruption to shipping since the US and Israel started their war with Iran on 28 February 2026.
Iraq’s oil and gas sector is currently going through a crisis due to the disruption to shipping through the Strait of Hormuz, which has caused the country’s oil exports to collapse.
READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDFGlobal energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.
Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
> REGIONAL LNG: War undermines business case for Middle East LNG> CAPITAL MARKETS: Damage avoidance frames debt issuance> MARKET FOCUS: Conflict tests UAE diversificationTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16729987/main.png -
Sabic registers profit in first quarter of 2026
8 May 2026
Saudi Basic Industries Corporation (Sabic) returned to profit in the first quarter of 2026, posting a net income of SR13.2m ($3.52m) compared to a SR1.21bn loss a year earlier.
The Saudi petrochemicals giant posted adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of SR4.15bn for the three months to 31 March, up 25% from the previous quarter.
The company’s revenue fell 6% quarter-on-quarter to SR26.15bn ($6.97m).
Adjusted net income was recorded in at SR816m, compared to a loss in the previous quarter, while adjusted earnings per share stood at SR0.27.
Adjusted earnings before interest and taxes rose to SR1.45bn, an increase of SR1.01bn from the prior quarter.
Sabic said its net position shifted to a debt of SR2.77bn at the end of March, from a net cash position of SR3.61bn at the end of 2025.
“Our transformation journey continues to deliver performance improvements that unlock greater value for our shareholders. We realised $220m at the Ebitda level on a recurring basis during the first quarter of 2026, in line with our planned improvement rate. This keeps us on track towards our cumulative 2030 annual target of $3bn, consisting of $1.4bn in cost excellence and $1.6bn in value creation,” Sabic CEO Faisal Alfaqeer said.
READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDFGlobal energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.
Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
> REGIONAL LNG: War undermines business case for Middle East LNG> CAPITAL MARKETS: Damage avoidance frames debt issuance> MARKET FOCUS: Conflict tests UAE diversificationTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16719476/main1840.jpg