Meed | Capacity building spurs upstream spending

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

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Indrajit Sen

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Nakheel awards $259m Dubai Islands buildings contract
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Morocco plans second high-speed rail phase to Agadir
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Riyadh tenders King Salman Stadium works
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Saudi Arabia raises electricity tariffs
26 October 2026

Saudi Energy, formerly Saudi Electricity Company, has announced revised electricity tariffs, with the new rates scheduled to take effect on 1 January 2027.

The revised tariff schedule, published on the company’s official website, covers residential, commercial, industrial, agricultural, charitable and government customers.

The largest percentage increase in consumption rates is 16.7%, for residential customers using up to 6,000 kilowatt-hours (kWh) a month. Residential customers will pay 21 halalas/kWh for monthly consumption of up to 6,000kWh, up from 18 halalas. For consumption above 6,000kWh, the rate will rise from 30 to 33 halalas/kWh, a 10% increase.

The industrial tariff will increase by 15%, from 20 to 23 halalas/kWh. Commercial customers, private healthcare facilities and private educational facilities will pay 25 halalas/kWh (up from 22 halalas) for consumption up to 6,000kWh a month, and 35 halalas/kWh above that level, up from 32 halalas.

Tariffs for charities and government customers will also increase. In addition to charges based on electricity consumption, customers will pay a fixed monthly fee determined by the capacity of their electricity metre. This replaces the previous separate charge for meter reading, maintenance and billing, with VAT applied to the revised tariffs.

Electricity investment

The new tariffs coincide with changes to water consumption tariffs announced by the National Water Company, also effective from 1 January 2027.

King Salman Bin Abdulaziz Al-Saud directed support measures following a proposal presented by Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.

This includes raising the minimum wage required for Saudi nationals to count as full employees towards private sector localisation quotas under the Nitaqat programme.

The tariff changes come as Saudi Arabia plans substantial investment in its electricity infrastructure. In September 2025, Saudi Energy announced plans to invest SR220bn ($58.7bn) in power infrastructure projects between 2025 and 2030.

A June 2025 report by Fitch Ratings forecast negative free cash flow of about SR16bn a year over the period and rising leverage, reflecting the financial demands of the programme.

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Mark Dowdall
Dubai Municipality confirms AED3bn Tasreef drainage awards
26 October 2026

Dubai Municipality has confirmed it has awarded four contracts worth AED3bn ($817m) to expand the emirate’s stormwater drainage network by about 100 square kilometres under phase three of the Tasreef programme.

The projects will cover Jumeirah, Umm Suqeim, Al-Quoz, Al-Barsha, Al-Wasl and Al-Marmoom. The works include constructing and extending main stormwater drainage lines with diameters of up to three metres.

The four packages are part of Dubai’s AED30bn Tasreef programme, which aims to increase the emirate’s stormwater drainage capacity by 700% and reduce costs associated with pumping stations, network operations and maintenance by 20%.

The contracts have been awarded to China State Construction Engineering Corporation (CSCEC) and three local firms: Arifco Group, Nael Construction & Contracting (NCC) and Detech Contracting. Dubai Municipality did not state which projects the awards relate to.

According to sources, the contract awards include packages TF-15-C1, TF-15-C2 and TF-13-C1.

The first package, TF-15-C1, involves the construction of 21 kilometres of main and secondary drainage lines along Al-Wasl Road and in surrounding areas. It will cover Za’abeel 2, Al-Wasl, Jumeirah 1 and 2, Al-Bada’a, Al-Satwa and Dubai World Trade Centre. The estimated $100m contract was awarded to Detech in July, as exclusively reported by MEED.

The second package, TF-15-C2, covers the corridor between Sheikh Zayed Road and Al-Khail Road. It includes about 14km of main drainage lines serving Al-Quoz Industrial Areas 1, 3 and 4, and Al-Barsha 1. In July, MEED reported that CSCEC had won the engineering, procurement and construction contract for this project.

The third package, TF-13-C1, covers Al-Marmoom, where 23km of drainage infrastructure will be developed. According to a source, Arifco has been awarded this contract.

The final package covers Jumeirah and Umm Suqeim, where about 42km of main drainage lines will serve Umm Suqeim 1, 2 and 3; Umm Al-Sheif; Jumeirah 3; Al-Safa 1 and 2; and Al-Manara.

In May, MEED reported that NCC had been awarded a contract to build a sewage and stormwater drainage system, DS-204. However, it is unconfirmed whether this relates to the same project.

Earlier, in February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

These included two contracts awarded to Detech and one to CSCEC for stormwater drainage infrastructure. In addition, two consultancy contracts were awarded for the study and design of drainage systems in selected areas across the emirate.

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Previously, in April 2025, an earlier package of awards was announced under phase one of the Tasreef programme. The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

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Nakheel awards $259m Dubai Islands buildings contract
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Dubai-based master developer Nakheel, part of Dubai Holding Real Estate, has awarded local firm Parkway International Contracting a construction contract valued at about AED950m ($259m) for phases two and four of Bay Grove Residences on Dubai Islands.

The package covers 617 residential units across eight buildings, ranging from one to four bedrooms, together with basement structures, infrastructure and community amenities including swimming pools, sports courts and fitness centres.

Phase two comprises 360 homes across four buildings, with main construction scheduled for completion in late 2028.

Phase four includes 257 homes across four buildings, with completion targeted for the second quarter of 2029.

The award follows an earlier contract valued at about AED800m ($218m) awarded to local contractor Metac General Contracting Company for phases one and three, covering 537 homes across seven buildings.

Together, the two contracts total more than AED1.75bn ($476m) and account for all 1,154 planned homes across the 15 buildings of Bay Grove Residences.

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In August 2025, Nakheel awarded Fibrex Contracting a AED2.6bn ($708m) construction contract for the Bay Villas residential project. That followed a AED527m ($143m) contract awarded to Al-Nasr Contracting Company in April 2026 for primary infrastructure and utilities on Island B.

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Morocco plans second high-speed rail phase to Agadir
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Morocco has outlined a second rail investment cycle for 2030-35, which includes beginning construction of a high-speed rail extension from Marrakech to Agadir and connecting Essaouira to the national rail network.

The pipeline forms part of the government’s 2026-31 programme, presented to parliament last week.

The Marrakech-Agadir link is estimated to cost close to MD55bn ($5.5bn) and will cover a 240-kilometre (km) route through the High Atlas Mountains via Chichaoua. Civil engineering structures, including tunnels and viaducts, are expected to account for nearly 70% of the alignment.

In September, the government issued a decree declaring the Marrakech-Agadir and Chichaoua-Essaouira rail corridors to be of public utility, paving the way for land acquisition and expropriation procedures.

Under the long-term masterplan Plan Rail Maroc 2040, Essaouira is expected to connect to the network via a separate line branching off at Chichaoua, designed for operating speeds of up to 200km an hour. The mainline to Agadir is designed for speeds of up to 320km/h.

The 2030-35 cycle also includes rehabilitating the Casablanca-Khouribga-Oued Zem line; constructing a new line between Oued Zem and Beni Mellal via Bejaad, with a branch to Fquih Ben Salah; doubling and upgrading the 140km Benguerir-Safi line; expanding capacity on the Fez-Oujda corridor; and building new-generation passenger stations.

The plans follow Morocco’s ongoing MD134bn ($13.4bn) 2024-30 rail investment programme, which focuses on completing the Kenitra-Marrakech high-speed line ahead of the 2030 Fifa World Cup.

The programme also includes developing regional express network services across five regions, electrifying the Fez-Oujda line and completing a freight rail link to the Nador West Med port.

Work on the Kenitra-Marrakech line had reached about 30% by May 2026, with commercial services targeted to begin in September 2029.

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Riyadh tenders King Salman Stadium works

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Saudi Arabia’s Sports Ministry has tendered a contract covering early works at King Salman International Stadium in Riyadh.

The scope includes enabling works, site preparation and initial construction activities.

The tender was issued on 11 October, with a submission deadline of 19 November.

The stadium will cover about 660,000 square metres (sq m) and seat 92,000. Facilities will include a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

The wider development will include sports facilities covering more than 360,000 sq m, including two training fields and fan zones; a closed sports hall; an Olympic-sized swimming pool; an athletics track; and outdoor courts for volleyball, basketball and padel.

The stadium is set to host the final of the 2034 Fifa World Cup and will serve as the Saudi national football team’s main base.

US-based architectural firm Populous is the lead architect for the stadium.

Construction of the stadium is expected to be completed by 2029.

The stadium will be located next to King Abdulaziz Park.

Firms submitted prequalification statements for the main design-and-build contract in February.

Saudi stadium plans

In August 2024, MEED reported that Saudi Arabia planned to build 11 new stadiums and refurbish four facilities for the 2034 Fifa World Cup.

Eight stadiums will be located in Riyadh, four in Jeddah and one each in Al-Khobar, Abha and Neom.

A further 10 cities will host training bases: Al-Baha, Jazan, Taif, Medina, Alula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.

There are expected to be 134 training sites in the kingdom, including 61 existing facilities and 73 new venues.

Saudi Arabia was officially selected to host the 2034 Fifa World Cup during an online convention of Fifa member associations at the Fifa Congress on 11 December 2024.

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