meed-logo

line1 line2 line3
SIGN IN / REGISTER

Capacity building spurs upstream spending

27 April 2023

 

The Middle East and North Africa (Mena) region, where a third of the world’s crude oil and about a quarter of its natural gas is produced, is increasing its hydrocarbons production potential.

There are an estimated $113.6bn-worth of upstream oil and gas projects in the engineering, procurement and construction (EPC) execution stage in the Mena region, according to data from regional projects tracker MEED Projects. 

Most of these schemes are set to be commissioned between this year and 2025, helping the region to consolidate its position as the largest producer of crude oil, natural gas and liquefied natural gas (LNG).

With the world still heavily reliant on hydrocarbons, and green energy sources falling short of meeting global energy needs, oil and gas producers in the region see more merit in investing in building upstream production potential.

Regional oil and gas industry leaders have been making the case for increasing spending on boosting hydrocarbons output capacity. Their purpose has been to draw the world’s attention to the role of fossil fuels as a bridge to achieving a clean energy transition, as well as to justify their major upstream capital expenditure (capex) programmes.

Saudi Arabia dominates

Saudi Aramco tops MEED’s ranking of state energy enterprises in the Mena region by the volume of upstream oil and gas projects under EPC execution, with nearly $41bn-worth of project value.

Aramco aims to increase its maximum oil output spare capacity to 13 million barrels a day (b/d) by 2027 from about 12 million b/d currently. It also plans to raise gas production by 50 per cent by the end of this decade. 

With a large portion of its under-execution projects expected to come online by the middle of this decade, the Saudi energy giant appears to be on track to meet its strategic output goals.

The largest Saudi Aramco project under execution is the $3bn-plus Berri increment programme, which was awarded to Italian contractor Saipem in July 2019. Through the project, Aramco plans to add 250,000 b/d of Arabian light crude from the offshore oil and gas field.

The planned facilities will include a new gas oil separation plant (GOSP) on Abu Ali Island to process 500,000 b/d of Arabian light crude and additional processing facilities at the Khursaniyah gas plant to process 40,000 b/d of associated hydrocarbons condensates.

The Berri increment programme will complement Saudi Aramco’s $15bn Marjan field development programme, EPC contracts for which were also awarded in July 2019. The scheme is an integrated project for oil, associated gas, non-associated gas and cap gas from the Marjan offshore oil and gas field.

The Marjan development plan includes provision of a new offshore GOSP and 24 offshore oil, gas and water injection platforms. The contract for the main GOSP, which is worth $3bn and is the first EPC package of the project, was awarded to McDermott International. The US contractor also won offshore package four, which involves the building of offshore gas facilities and is valued at about $1.5bn.

The offshore development project aims to increase the production of the Marjan field by 300,000 b/d of Arabian medium crude oil, process 2.5 billion cubic feet a day (cf/d) of gas and produce an additional 360,000 b/d of ethane and natural gas liquids.

Looking ahead, Aramco expects capital expenditure in 2023 to be $45bn-$55bn, including external investments. This projected spending is at least 20 per cent higher than the company’s $37.6bn capex in 2022.

Qatar’s LNG expansion

With the goal of consolidating its position as the world’s largest supplier of gas, QatarEnergy continues to progress with its North Field LNG expansion programme. The project, which is estimated to be worth about $30bn, will increase Qatar’s LNG production to 126 million tonnes a year (t/y) in two phases by 2027.

The two-stage North Field Production Sustainability (NFPS) programme will run in parallel, to help maintain gas production from the offshore reserve in order to match the feedstock requirements of the LNG expansion scheme.

QatarEnergy led spending on upstream projects in 2022 for the second year in a row, accounting for more than a third of the $18.9bn EPC contract awards in the Mena region. The firm’s overall value of EPC projects under execution stands at $27.3bn, putting it in second place in MEED’s ranking of the biggest national oil companies by volume of under-execution projects.

Launched in 2017, the North Field East (NFE) project constitutes the first phase of QatarEnergy’s North Field LNG expansion project. As well as an LNG output of 32 million t/y, NFE will produce 4,000 tonnes a day (t/d) of ethane as feedstock for future petrochemicals developments, 260,000 b/d of condensates, 11,000 t/d of liquefied petroleum gas (LPG) and 20 t/d of helium.

The EPC works on QatarEnergy’s NFE project were divided into six packages – four onshore and two offshore – and are currently progressing. 

QatarEnergy awarded a $13bn contract for NFE package one to a consortium of Chiyoda and TechnipEnergies in February 2021. The package covers the EPC of four LNG trains, each planned to have an output capacity of about 8 million t/y. 

QatarEnergy’s largest award in 2022 was a $4.5bn EPC contract that was won by Saipem for the building and installation of two gas compression facilities as part of the second development phase of its NFPS project. The gas compression complexes covered in the package known as EPCI 2 will weigh 62,000 tonnes and 63,000 tonnes and will be the largest fixed steel jacket compression platforms ever built.

Abu Dhabi ambitions

Abu Dhabi National Oil Company (Adnoc) adopted a five-year business plan in November last year that covers a capex budget of $150bn for 2023-27. The budget also sets the target of achieving its oil production capacity goal of 5 million b/d by 2027 rather than 2030.

The oil production increment projects that it has under execution are expected to play a key role in enabling the Abu Dhabi major to attain its accelerated oil capacity target.

The largest of Adnoc’s under execution projects is a $1.4bn EPC contract awarded to Spanish contractor Tecnicas Reunidas in late 2018 for upgrading the Bu Hasa onshore oil field development. Through this project, Adnoc plans to increase the Bu Hasa field’s production from 500,000 b/d to 650,000 b/d. 

On the gas production front – a core priority for Adnoc – $1.5bn-worth of EPC contracts were awarded to Abu Dhabi’s National Petroleum Construction Company (NPCC) and Tecnicas Reunidas in November 2021 for the offshore and onshore packages, respectively, of the Dalma sour gas field development project.

When completed in 2025, the project will enable the Dalma field to produce about 340 million cf/d of natural gas.

The Abu Dhabi energy giant further intends to raise its total gas output by 3 billion cf/d in the next few years. The Hail and Ghasha offshore sour gas production project will be central to achieving this goal.

In January, Adnoc signed pre-construction services agreements (PCSAs) with France-headquartered Technip Energies, South Korean contractor Samsung Engineering and Italy’s Tecnimont for the Hail and Ghasha onshore package. Saipem, NPCC and state-owned China Petroleum Engineering & Construction Company secured a PCSA for the offshore package.

While the onshore and offshore PCSAs awarded to the two consortiums by Adnoc are valued at $80m and $60m, respectively, the EPC packages are estimated to be worth $5.5bn and $5bn.

As part of the PCSAs, the contractors are required to perform initial detailed engineering and procurement for important long-lead items. 

Based on proposals to be submitted later this year, Adnoc is expected to award the same contractors the contracts for the main EPC works on the Hail and Ghasha project.

Production from the Ghasha concession, where the Dalma and Hail and Ghasha fields are located, is expected to start in 2025, ramping up to more than 1.5 billion cf/d before the end of this decade. 

Main image: Saudi Aramco tops the ranking of state energy enterprises in the Mena region with almost $41bn-worth of projects under execution. Credit: Aramco

https://image.digitalinsightresearch.in/uploads/NewsArticle/10791190/main.gif
Indrajit Sen

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

Click here to register
Exclusive from Meed
Related Articles
  • GCC reviews first phase of water interconnection study

    17 August 2026

    The GCC General Secretariat has completed the first phase of a study examining the feasibility of developing water interconnection projects between GCC member states.

    A two-day workshop reviewing the study’s findings concluded on 12 August at the headquarters of the GCC Interconnection Authority (GCCIA) in Dammam, Saudi Arabia.

    The GCC General Secretariat organised the workshop in cooperation with GCCIA, with representatives from relevant authorities and experts in water, infrastructure and water security taking part.

    Participants reviewed the first phase findings, including an assessment of existing water supply infrastructure and the actual water needs of GCC member states. They also discussed the technical requirements and data needed to complete the study.

    The study is intended to identify practical options and feasible solutions for developing a regional water interconnection network. This includes establishing an implementation roadmap.

    The initiative aims to improve the GCC states’ ability to respond to emergencies and crises and support continuity of water supplies.

    First meeting

    The workshop followed a virtual meeting on 22 July between the GCC General Secretariat and Saudi Arabia’s water authorities as part of the study.

    That meeting, which also involved consultancy Artelia, reviewed the study’s methodology and implementation stages. These include assessing existing water systems across GCC states, their resilience and emergency readiness, and developing technical options for bilateral water interconnection projects.

    In Saudi Arabia, the study is focused primarily on the Eastern Province and Riyadh. It is assessing water production and desalination facilities, transmission pipelines, strategic reservoirs, pumping stations and existing and planned projects.

    The study is also examining potential bilateral connections between Saudi Arabia and Bahrain, Kuwait and Qatar, as well as the possibility of a connection with the UAE.

    The 22 July meeting also discussed potential connection points and routes, water flow directions and the possibility of designing interconnection pipelines to operate in both directions.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18802726/main.jpg
    Mark Dowdall
  • Neom’s next phase is crucial to green hydrogen pipeline

    17 August 2026

    Commentary
    Mark Dowdall
    Power & water editor

    The completion of construction at Neom Green Hydrogen comes at an important point for Saudi Arabia’s wider hydrogen ambitions.

    The project has already shown that a large green hydrogen scheme can secure financing by reaching financial close in 2023 with long-term offtake from Air Products.

    With the facility now moving into commissioning ahead of a targeted commercial operations date next year, Neom could soon give lenders and developers real evidence on the performance, costs and risks of a large-scale green hydrogen project.

    That could be important for projects still moving through development. Acwa’s Yanbu Green Hydrogen Hub, for example, is targeting commercial operations in 2030.

    The project has brought in Germany’s EnBW as a co-developer and minority investor and Japan’s Itochu as a co-developer, investor and offtaker. Acwa is targeting production of 2.5 million tonnes a year of green ammonia from the hub.

    Saudi Arabia is also putting more of the framework around the industry in place. In July, the government granted Acwa exclusive rights to export green hydrogen produced in the kingdom along with its derivatives, including green ammonia, methanol and fuels.

    However, partnerships and policy support alone will not remove the commercial questions facing projects. Yanbu still needs to progress through development and secure the financing needed to move into construction.

    Neom’s financing structure and 30-year offtake may be specific to the project, but its operating performance should give future developers and lenders a clearer reference point for assessing production, reliability and costs.

    While Neom will not make the next projects bankable on its own, if it stays on track and performs as expected, it could give lenders a stronger basis for assessing projects that follow. In the long-run, this could be one of its most important contributions.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18800285/main.jpg
    Mark Dowdall
  • Five bid for King Salman Bay construction work

    17 August 2026

     

    Five teams have submitted bids for the contract covering the marine infrastructure works at King Salman Bay on the Red Sea coast, north of Jeddah.

    MEED understands that the bids were submitted on 31 July.

    The bidders include:

    • Deme / Archirodon (Belgium/Netherlands)
    • ⁠Van Oord (Netherlands)
    • ⁠Abdulmohsen Altamimi / NMDC Group (local/UAE)
    • ⁠Urbacon / Negida Contracting  (Qatar/Egypt )
    • ⁠Modern Building Leaders / China Harbour (local/China)

    The scope includes dredging and earthworks, as well as quay wall and edge protection works spanning about 11 kilometres.

    King Salman Bay is expected to be a waterfront development that aims to reshape the city’s northern Red Sea frontage into a mixed-use destination, anchored by public-realm improvements and leisure-led development.

    Saudi gigaproject developer Red Sea Global (RSG) is developing the project.

    The latest development follows RSG’s award of an estimated SR100m ($27m) contract to construct a solid waste management centre at its Red Sea Project. The scope includes four buildings: a materials recycling facility, a transfer station, an administration building and a vehicle maintenance building.

    In October last year, MEED reported that RSG had secured a SR6.5bn ($1.7bn) credit facility to further develop Amaala, its luxury tourism destination on Saudi Arabia’s northwestern Red Sea coast.

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

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18800910/main.jpg
    Yasir Iqbal
  • PDO allows more time for Al-Ghubar field project prices

    17 August 2026

     

    Petroleum Development Oman (PDO) has allowed contractors additional time to prepare commercial bids for a project to build a new facility to handle additional oil production from the Al-Ghubar field in the sultanate.

    The Al-Ghubar field is located in the Ghaba Salt Basin at Qarn Alam, within majority state-owned PDO’s Block 6 concession area.

    The Al-Ghubar gas-oil gravity drainage (GOGD) facility will be designed as a sour (hydrogen sulphide) facility and is expected to handle maximum oil production of 1,800 standard cubic metres a day (cm/d), a maximum total water flow rate of 10,421 standard cm/d, and maximum gas lift of 256,934 standard cm/d. Production from the planned Al-Ghubar GOGD facility will be exported to PDO’s main oil line.

    Following receipt of the technical bids for the project in July, PDO granted contractors additional time – until 16 August – to submit commercial bids for the project, MEED recently reported.

    The project operator has now extended the deadline for submitting commercial bids to 1 September, sources told MEED.

    PDO floated the tender for the Al-Ghubar GOGD facility project in March, setting an initial bid submission deadline of 4 May, MEED previously reported.

    PDO later extended the deadlines for submission of technical and commercial bids to 26 July and 7 August, respectively. Contractors submitted technical proposals by the revised deadline, according to sources.

    The following contractors, among others, are understood to be bidding for the project:

    • Archirodon (Greece)
    • Engineering for the Petroleum & Process Industries (Egypt) / Petrojet (Egypt)
    • Jereh (China)
    • Kent (UAE)
    • Larsen & Toubro Energy Hydrocarbon (India)

    The scope of work on the Al-Ghubar GOGD facility project covers the engineering, procurement and construction (EPC) of the following:

    • On-plot scope consists of:
      • Production separator  
      • Test separator  
      • Concentric wash tank
      • Wet oil pump
      • Water bath heater
      • Surge tank
      • Gas injection/gas lift compressor (centrifugal)
      • Utilities (Instrument Air compressors, chemical injection skids, drain system, vent system) 
      • Suction scrubber
      • Air coolers
      • Discharge scrubbers
      • Condensate flash drum
      • Atmospheric pressure knock-out drum 
      • Flare system
      • Gas heater
      • Water disposal pump
      • Oil shipping pump
      • New 132kV substation and plant substation (housing 6.6kV & 415-Volt switchboard)
      • New control room
         
    • Off-plot scope consists of:
      • Off-plot pipeline network (bulk header, test header, gathering infrastructure/ gathering line header, instrument air header, water disposal header)
      • Two remote manifold stations 
      • Tie-in connection to main oil line
      • Tie-in to gas network pipeline

    PDO previously intended to tender the Al-Ghubar GOGD project 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 barrels a day (b/d) of oil and condensates from those fields.

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

    ALSO READ: PDO floats tender for major flare gas monetisation scheme
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18799485/main.jpg
    Indrajit Sen
  • L’imad eyes full takeover of AD Ports Group

    17 August 2026

    Abu Dhabi’s sovereign investor, L’imad Holding, has announced its intention to take full ownership of AD Ports Group by offering to acquire the remaining 24.6% of its publicly listed shares through a voluntary, conditional, all-cash tender offer.

    The bid will be launched via L’imad’s wholly owned unit, Abu Dhabi Developmental Holding Company (ADQ), which already controls 75.42% of AD Ports Group. The offer seeks to acquire 100% of the issued and paid-up share capital and take the port operator private.

    Shareholders would be offered AED6.25 per share in cash. L’imad said the offer provides investors with “an attractive opportunity to realise certain and immediate value”.

    Based on the proposed terms, the transaction values the remaining free float at about AED31.8bn ($8.66bn).

    Rothschild & Co’s local office has been appointed financial adviser.

    Emirates NBD Bank and First Abu Dhabi Bank will act as joint lead receiving banks, while Emirates NBD Capital and First Abu Dhabi Bank will serve as joint lead managers.

    Cairo-headquartered EFG Hermes has been appointed co-lead manager, and UK-based Allen Overy Shearman Sterling is acting as legal adviser.

    The move comes shortly after AD Ports Group posted its strongest quarterly performance to date, reporting an 88% increase in second-quarter net profit to AED836m ($227m).

    Revenue for the second quarter of this year rose 47% to $2bn, supported by gains across maritime and shipping, economic cities and free zones, and logistics.

    In January, Abu Dhabi approved plans to consolidate ADQ’s investment portfolio into L’imad Holding under the chairmanship of Abu Dhabi Crown Prince Sheikh Khaled Bin Mohamed Bin Zayed Al-Nahyan.

    L’imad has been mandated to build, develop and manage a diversified portfolio of assets and projects in priority sectors in the UAE and internationally, with a focus on infrastructure and real estate, financial services, and asset and investment management.

    Once fully consolidated, the platform will encompass more than 25 investment companies and platforms, alongside over 250 subsidiaries.

    L’imad’s portfolio includes Taqa (utilities and power), Modon Properties (real estate), Etihad Airways (aviation), PureHealth (healthcare), Etihad Rail (transport infrastructure), Wio Bank (digital finance), AD Ports (logistics and maritime trade), McLaren (motorsport) and Louis Dreyfus (agricultural commodities).

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18798489/main.jpg
    Yasir Iqbal