Aramco explores PPP pathway
29 May 2024
The June 2024 Agenda package also includes:
> Riyadh reins in spending
> PPP offers budget and efficiency routes
> Opening up property sales in Saudi Arabia
At the start of this year, the Saudi Energy Ministry directed Aramco to abandon its campaign of raising maximum oil production from 12 million barrels a day (b/d) presently to 13 million b/d by 2027. The course correction, however, is expected to have little bearing on Aramco’s oil and gas project spending.
The Saudi energy giant has already spent approximately $10.5bn on projects so far this year, following project capital expenditure (capex) of more than $23bn last year. The company’s total capex in 2024 is estimated to be in the range of $48bn to $58bn.
The command from the Saudi Energy Ministry on 30 January suggests that Aramco could be encouraged to transform itself from a spending behemoth to a magnet for project investments going forward.
In other words, the state enterprise could, increasingly, be seen exploring joint projects with foreign investors, as it ventures into new energy sectors, such as carbon capture, utilisation and storage (CCUS) and low-carbon hydrogen/ammonia.
Testing the waters
As the main engine of Saudi Arabia’s economy, Aramco has also contributed towards building social infrastructure in the kingdom. The company has been building housing facilities, hospitals and schools for decades, and has successfully implemented the public-private partnership (PPP) model for such projects.
But Aramco took its PPP agenda to the next level with the launch of the first such scheme in its main oil and gas business in 2021. The project involves modifying and upgrading sulphur recovery units (SRUs) at seven gas processing plants located in the kingdom's Eastern Province.
Under the desulphurisation programme, Aramco expects third-party investors to build large downstream tail gas treatment units to collect and process tail gas discharged from SRUs at the identified gas plants. The facilities are to be developed on a build-own-operate (BOO) or build-own-operate-transfer (BOOT) basis.
Two consortiums, led by Saudi Arabia-based Lamar Holding and Vision Invest, respectively, submitted proposals last year. Aramco is expected to pick one of the two teams this year as the developer of the desulphurisation PPP scheme.
These projects also potentially point towards a revised mandate
Separately, Aramco has also brought on board international partners – the likes of SLB, Linde, Air Products and Baker Hughes – for an ambitious, large-scale CCUS project that it initiated early last year.
The Accelerated Carbon Capture & Sequestration (ACCS) scheme will have nine phases and aims to capture 44 million tonnes a year of CO2 from Aramco’s gas processing plants. The first phase is gaining traction, with Aramco shortlisting contractors to bid for the main tender, although progress has been slow.
The desulphurisation PPP scheme and ACCS programme are examples of Aramco’s willingness to work with external players in projects related to its fundamental operations.
These projects also potentially point towards a revised mandate for Aramco to tighten its projects purse in order to make more funds available for its main shareholder – the Public Investment Fund – to spend on Saudi Vision 2030 plans and the kingdom’s gigaprojects.
MEED's April 2024 special report on Saudi Arabia includes:
> GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
> BANKING: Saudi lenders gear up for corporate growth
> UPSTREAM: Aramco spending drawdown to jolt oil projects
> DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
> POWER: Riyadh to sustain power spending
> WATER: Growth inevitable for the Saudi water sector
> CONSTRUCTION: Saudi gigaprojects propel construction sector
> TRANSPORT: Saudi Arabia’s transport sector offers prospects
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The agreements cover the joint development of two solar projects with a combined capacity of 150MW.
The companies have also signed a framework agreement to explore the development of more than 400MW of pumped hydro energy storage projects.
The projects will be the first to be progressed through a 50:50 joint venture planned by Masdar and EPCG.
The two companies signed a joint venture agreement in April as part of a wider 2GW renewable energy partnership in Montenegro.
The latest agreements were signed in the presence of Sultan Al-Jaber, UAE minister of industry and advanced technology and chairman of Masdar, and Admir Sahmanovic, Montenegro’s minister of energy and mining.
Masdar has an existing presence in Montenegro through its investment in the 72MW Krnovo wind farm.
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Geopolitics tests Dubai property with hotels hardest hit
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Dubai’s residential market cooled sharply in the second quarter of 2026, and the hospitality sector recorded its steepest downturn in years, according to US-based real estate research firm CBRE’s latest UAE market review. Office and industrial real estate, however, continued to defy a weaker macroeconomic backdrop, the report said.
The figures, published on 28 July, mark a turning point for a residential sector that has driven much of Dubai’s post-pandemic growth story.
Transaction volumes fell 29% year-on-year to just under 37,000 sales in the second quarter, down from more than 51,000 in the same period last year.
Total transaction values dropped even further, to AED88bn ($24bn) from close to AED154bn ($42bn) in the second quarter of 2025.
Rents have moved into negative territory faster than prices. While sales values were still up 1.9% year-on-year, average residential rents fell 2.6% annually and 6.2% quarter-on-quarter.
About 18,000 new units were completed in the first half of the year, adding to supply just as demand and transaction activity were softening.
The contrast with Abu Dhabi is stark. The capital’s residential values rose 21.6% year-on-year, powered by 24.4% growth in apartment prices, while rents climbed a further 3.6%.
Sales values reached AED32bn ($8.7bn), up 150% on the same quarter last year, with transaction volumes up around 80%.
Off-plan sales accounted for roughly 83% of deals and 85% of value, underscoring investor appetite for new launches even as Dubai’s own off-plan pipeline slows.
Hospitality bears the brunt
The hospitality sector recorded the most pronounced downturn of any asset class tracked in the review. Regional geopolitical disruption weighed heavily on international travel demand and airline operations through the first half of the year, with UAE-wide hotel occupancy down 27.7 percentage points year-on-year to June and revenue per available room (RevPAR) down 31.8%, according to CoStar data cited in the report.
Dubai absorbed the sharpest declines, reflecting its greater reliance on international visitor flows, while Abu Dhabi held up comparatively better on the strength of domestic demand and events-led tourism.
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Office and industrial hold strong
Away from housing and hotels, the picture is markedly different. Dubai office rents rose 13% year-on-year, with prime rents up 16% and occupancy at about 94%, as demand concentrated in DIFC, Tecom and DMCC continues to outpace the delivery of new Grade A stock.
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READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDFStress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.
Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
> AIRPORTS: Dubai and Riyadh reaffirm airport ambitions> INDUSTRY REPORT: Dubai eyes tourism sector recovery> DATA CENTRES: Big Tech falls short on data centre promise> LEADERSHIP: Aramco’s citizen developers accelerate digital changeTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/17792437/main.jpg -
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Sabah Al-Ahmad residential city
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Ashghal tenders northern Smaisma infrastructure consultancy
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Qatar’s Public Works Authority (Ashghal) has issued a tender for consultancy services related to infrastructure development in the northern Smaisma area.
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