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
  • SAR tenders design review consultancy for GCC rail link

    18 September 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia Railways (SAR) has issued a request for proposals (RFP) for a design management and review consultant to oversee engineering works on the GCC railway network, the latest step in advancing the long-delayed regional rail link.

    The RFP was issued on 9 September, with a submission deadline of 18 October.

    The tender seeks a consultant to manage, audit and verify deliverables produced by SAR's separately appointed design services consultant, rather than carry out the design itself. The tendering for the design services consultancy is currently in progress.

    Construction will be tendered separately through competitive bidding once designs are approved.

    The GCC railway will run for about 672 kilometres (km) inside Saudi Arabia, linking the kingdom's existing network to Kuwait, Qatar, the UAE and Bahrain, with four sections of about 141km, 200km, 151km and 21km, respectively.

    The line is planned as a single-track, non-electrified corridor for mixed freight and passenger traffic, with a maximum axle load of 32.4 tonnes and passing loops for bidirectional working.

    The appointed consultant will develop a design management and review plan covering governance, interdisciplinary coordination and stage-gate approvals, and will issue formal review and audit reports against SAR's requirements and international standards.

    The scope also covers stakeholder engagement, interface management and oversight of land acquisition activity tied to the design consultant's land acquisition plan.

    Key design stages are expected to take about 16 months: four months for concept design, six for preliminary design and six for issued-for-construction design, each with four weeks of contingency.

    SAR has asked bidders to mobilise a core team from day one. These must include a project director, engineering and design manager, stakeholder manager and lead document controller, all based at SAR's offices, with minimum experience thresholds ranging from three years for junior operators up to 25 years, including 15 in rail, for the project director role.

    GCC railway line

    Under the overall plan, the railway will run from Kuwait, pass through Dammam in Saudi Arabia, reach Bahrain via a planned causeway, and continue from Dammam to Qatar, the UAE and, ultimately, Muscat via Sohar in Oman. The railway is reported to cover about 2,186km in total.

    The route length within each member state is as follows:

    • UAE – 684km
    • Saudi Arabia – 672km
    • Oman – 306km
    • Qatar – 283km
    • Kuwait – 145km
    • Bahrain – 36km

    The railway is designed for passenger trains travelling at 220 kilometres an hour (km/h) and freight trains operating at 80km/h–120km/h.

    With high levels of project activity, governments in spending mode and renewed cooperation under the Al-Ula Declaration, the latest efforts to restart the GCC railway project may make more progress than previous attempts. If completed, the railway could prove transformational for a region that is globally connected but still divided by national borders.

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

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19783331/main.gif
    Yasir Iqbal
  • Tender issued for Libyan gas project

    17 September 2026

    An invitation to bid has been issued for a contract to conduct environmental assessments for the project to expand the Mellitah oil and gas complex in Libya.

    The bid submission deadline is 2pm today (17 September) Libyan time.

    The scope of the project includes provision of:

    • An environmental baseline study (EBS)
    • An environmental impact assessment (EIA)
    • An environmental management plan (EMP)

    The client is Mellitah Oil & Gas (MOG), which is a joint venture of Italy’s Eni and Libya’s National Oil Corporation (NOC).

    MOG is based in Tripoli and operates both onshore and offshore oil and gas facilities.

    The joint venture owns and operates six major oil and gas fields across the North African country.

    According to the tender documents, the company that is awarded the contract will need to prepare environmental management measures in compliance with:

    • Libyan environmental legislation
    • Ministry of Environment requirements
    • NOC environmental guidelines
    • Applicable international environmental standards and best practices

    The expansion of the Mellitah oil and gas complex is part of a project estimated to be worth $8bn.

    The wider project is known as the Mellitah Complex Expansion & CO2 Management Integrated Development Project.

    It has six main packages:

    • Onshore package
    • Offshore Structure A
    • Offshore Structure E
    • Subsea pipeline package
    • Site preparation work
    • Carbon capture and storage facility

    Security issues and political instability have been a major problem for Libya’s oil and gas sector since the country’s civil war started in 2011.

    Earlier this month, the Mellitah oil and gas complex was forced to shut down temporarily due to a protest over deteriorating public services.

    The existing onshore complex includes housing, processing units, storage facilities and export facilities.

    It also serves as the launch point for the Greenstream pipeline, which delivers Libyan gas directly to Italy.

    The planned expansion of the complex will involve:

    • Construction of a new fourth gas processing train
    • Construction of a third condensate train
    • Construction of a third natural gas liquids fractionation train
    • Construction of a fourth sulphur recovery unit train
    • Installation of a hydrogen sulphide enrichment unit
    • Installation of a sulphur recovery unit
    • Construction of other associated facilities

    The Mellitah complex is located about 100 kilometres west of Tripoli and is a key energy facility in the west of the country.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19748920/main.png
    Wil Crisp
  • Nakheel awards $218m Dubai Islands buildings deal

    17 September 2026

    Register for MEED’s 14-day trial access 

    Dubai-based developer Nakheel, now part of Dubai Holding, has awarded a main construction contract worth more than AED800m ($218m) for phases one and three of Bay Grove Residences at Dubai Islands.

    The contract was awarded to the local firm Metac General Contracting Company.

    It covers the construction of 537 apartments, comprising one- to four-bedroom units, across seven residential buildings.

    Phase one includes 296 units in four buildings, while phase three comprises 241 units across three buildings.

    The works are scheduled for completion in late 2028.

    Bay Grove Residences will ultimately comprise 1,154 homes across 15 buildings. Planning is under way for the remaining 617 homes in phases two and four, with further contract awards expected.

    In August last year, Nakheel awarded a AED2.6bn ($708m) contract to Abu Dhabi-based Fibrex Contracting to build the Bay Villas project at Dubai Islands. The contract includes constructing 636 villas.

    In April this year, another AED527m ($143m) contract was awarded to local firm Al-Nasr Contracting Company to construct the primary infrastructure and utilities works on Island B at the development.

    The Dubai Islands development consists of five islands spanning 18.6 square kilometres. It features more than 59 kilometres (km) of waterfront and 20km of beaches, as well as parks, golf courses, promenades and cycling paths.

    The offshore island project gained renewed momentum in 2022, when Nakheel unveiled a new masterplan and rebranded it as Dubai Islands.

    The reclaimed islands were originally part of the Palm Deira project, which was partially completed before being put on hold in 2008.

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

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19748850/main.jpg
    Yasir Iqbal
  • Aldar and Mubadala acquire Masdar City Square

    17 September 2026

    Abu Dhabi-based sovereign wealth fund Mubadala Investment Company and local developer Aldar have completed the acquisition of Masdar City Square at Masdar City, in a transaction valued at AED918m ($250m).

    The deal was executed through their joint venture established in 2024.

    Masdar City Square comprises more than 47,000 square metres (sq m) of net leasable area across seven office buildings.

    Completed in Q1 2026, the development is 99% occupied. Tenants include Taqa, the Department of Energy, Emirates College and the Mohamed Bin Zayed University of Artificial Intelligence.

    The transaction expands the joint venture’s real estate portfolio in Masdar City, which is now valued at AED4.7bn ($1.3bn).

    Masdar City is one of the region’s leading hubs for clean energy, artificial intelligence, advanced research and sustainable urban development.

    The joint venture acquired The Link project at Masdar City for AED654m ($178m) in April.

    Comprising about 32,000 sq m of net leasable area across five buildings, The Link is fully leased to a portfolio of major tenants, including Abu Dhabi Future Energy Company (Masdar) and the Mohamed Bin Zayed University of Artificial Intelligence.

    The asset includes Grade A, Leed Platinum office space, a net-zero-energy headquarters building, a multi-use hall and residential accommodation, supporting its position as a high-performing, integrated component of Masdar City.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19748241/main5814.png
    Yasir Iqbal
  • Neom tenders Oxagon highway contract

    17 September 2026

     

    Saudi Arabia’s Neom has tendered a design-and-build contract covering permanent upgrade works on Highway 55 in the kingdom’s Oxagon region.

    The first phase of the project includes constructing 14 kilometres of road, with two lanes in each direction. It also covers one bridge and three interchanges.

    The project duration is 22 months.

    Contractors have been given until 21 September to submit their proposals.

    Highway 55 connects the Red Sea coast with the mainland in northwestern Saudi Arabia. It is currently the only road providing north-south connectivity between Duba and the Neom region.

    MEED exclusively reported in August 2025 that contractors had submitted responses to the expressions of interest notice that Neom had issued earlier that month.

    The project is expected to support the movement of cargo vehicles from Duba Port to other parts of the country and the wider region.

    Neom tested a pilot initiative last year by handling a shipment that travelled from Cairo via the Port of Safaga, across the Red Sea to the Port of Neom, and then inland to Erbil, Iraq.

    In a statement, Neom said: “The shipment travelled through an intermodal corridor spanning over 900 kilometres, marking a significant milestone in the kingdom’s transformation into a regional and global logistics hub.”

    The Port of Neom is located on the Red Sea near the Arar border, a key entry point into Iraq.

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

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19746896/main.gif
    Yasir Iqbal