meed-logo

line1 line2 line3
SIGN IN / REGISTER

Events in January will shape Saudi market in 2024

1 February 2024

 

Register for MEED's guest programme 

January was a pivotal month for Saudi Arabia with a series of significant events that will shape how the market performs in 2024.

The month started well with major project deals signed that boosted confidence further after the market recorded its best-ever total value of contracts awarded. That optimism was tempered later in the month as fresh concerns over the outlook for project spending emerged after a high-profile corruption case and a government directive instructing Saudi Aramco to halt its plans to increase the kingdom’s oil production capacity.

Oil decision

In a statement on 30 January, Aramco said it had received a directive from the energy ministry to maintain its maximum sustainable capacity (MSC) at 12 million barrels a day (b/d). The state energy giant had previously been set a target of achieving an oil output spare capacity of 13 million b/d by 2027.

While some have interpreted the decision as a political move aimed at propping up the global oil price, others say it has been made to reduce capital expenditure commitments so Aramco can make larger dividend payments to its shareholders. The government holds a 90% share of the company, the PIF owns an 8% stake, and the remaining 2% of the shares are listed on the Saudi Stock Exchange (Tadawul).

Building boom

For construction, the largest contract award in January was the $4.7bn deal signed by Italy’s WeBuild to deliver three dams at the Trojena mountain resort in Neom that will host the 2029 Asian Winter Games. Other major deals included the SR1.8bn deal signed by Dubai-based Alec for constructing the Ilmi Centre at Misk, and the local MBL being selected for the contract to build the opera house at Jeddah Central.

Meanwhile at Al Ula, the kingdom’s Oversight & Anti-Corruption Authority (Nazaha) has suspended the CEO of the Royal Commission for Al Ula Governorate on the grounds of corruption and money-laundering charges. The charges against the executive, Amr Bin Saleh Abdul Rahman Al Madani, relate to his activities both before and during his role at the Royal Commission, involving the awards of contracts to a company named National Talents Company (TalentS).

Economic forecasts

These developments came amid a backdrop of mixed economic data. In mid-January, the Washington-based IMF revised the expected real GDP growth figure for Saudi Arabia in 2024 to 2.7%, down from the projection of 4% that it made three months earlier in October. The downgraded forecast reflects Saudi Arabia’s deepening oil production cuts.

Saudi Arabia’s additional voluntary cuts are by far the deepest by Opec+, with Riyadh agreeing to cut its oil production by a further 1 million barrels a day (b/d) through to the end of Q1 2024 – a cut double the size of the voluntary 500,000 b/d reduction by Russia – the next largest – for the same period.

Despite Western sanctions, Russia has also overtaken Saudi Arabia as China’s biggest source of oil imports in 2023. According to Chinese customs data released on 22 January, China – the largest oil importer in the world – purchased a record 107.2 million tonnes of crude oil from Russia last year, about 25% more than in 2022. Falling by 1.8%, China imported about 86 million tonnes of oil from Saudi Arabia.

A more positive indicator for Saudi Arabia is FDI. The kingdom’s foreign direct investment (FDI) inflows increased by 29.1% in the third quarter of 2023 compared to the previous three months, according to the Saudi Central Bank.

FDI inflows reached SR7.99bn ($2.13bn), rising from SR6.2bn recorded in the previous quarter. The announcement follows last year’s amendment of the country’s FDI calculation methodology by the government in Riyadh, showing that inflows doubled from 2015 to 2022.

Debt deals

As the economic outlook cools, Riyadh has tapped the debt markets. At the start of January, the Finance Ministry said it expects to borrow $23bn in 2024. The financing will be used to finance the deficit in the state budget and to pay existing debt that matures. The ministry added that by the end of 2024, it expects the kingdom’s total debt portfolio to reach SR1.115tn, which is about 29 per cent of GDP. That announcement was quickly followed by the issuance of $12bn of bonds under Saudi Arabia’s Global Medium-Term Note Issuance Programme (GMTN). Later in January, the Public Investment Fund (PIF) completed a $5bn bond issuance.

Both the government and the PIF could receive a cash boost from selling more shares in Saudi Aramco on the Tadawul. On 31 January, Bloomberg reported that the kingdom is working with a group of advisers and is seeking to potentially raise at least $10bn.

These developments are important for the projects sector. According to regional projects tracker MEED Projects, there are contracts valued at $181bn at the tender stage in the kingdom. The prospects for many of these pending deals will be shaped by what happened in January.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11481164/main.gif
Colin Foreman

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

Click here to register
Exclusive from Meed
Related Articles
  • Public Investment Fund backs Neom

    16 April 2026

    Commentary
    Colin Foreman
    Editor

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Public Investment Fund (PIF) has backed Neom by including it as one of six strategic ecosystems in its newly approved 2026-30 strategy.

    The future of the $500bn gigaproject had been thrown into doubt following the postponement of the 2029 Asian Winter Games at the Trojena mountain resort, the cancellation of construction contracts – such as the $5bn deal with Italian contractor Webuild for dam works at Trojena – and the slowdown of development at The Line, where tunnelling contracts were cancelled and staff left the project.

    The backing comes as Neom’s operational focus appears to be evolving in response to shifting regional dynamics and global economic conditions. For example, on 15 April Neom posted on its official X account about a new Europe-Egypt-Neom-GCC corridor, describing it as a faster route for time-sensitive goods. It said the corridor combines trucking and ferry services to move goods quickly into the Gulf, adding that importers from several European markets are already using it to reach the UAE, Kuwait, Iraq, Oman and beyond.

    Powered by Pan Marine, DFDS and regional RoPax services, the initiative is positioned as a way to add flexibility and resilience to regional supply chains. This emphasis on logistics and immediate trade utility suggests a shift away from the more speculative architectural announcements that characterised Neom’s early years, towards activity more directly tied to current market realities.

    PIF’s broader 2026-30 strategy places heavy emphasis on “delivering competitive domestic ecosystems to connect sectors, unlock the full potential of strategic assets, maximise long-term returns and continue to drive the economic transformation of Saudi Arabia”.

    The inclusion of Neom as a standalone ecosystem within the Vision Portfolio suggests that while the project remains part of the kingdom’s Vision 2030 goals, it will be subject to the fund's focus on working with the private sector.

    That means the long-term success of Neom will increasingly depend on its ability to attract external investment and function as a viable economic hub rather than just a state-funded construction site.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16417262/main.jpeg
    Colin Foreman
  • Kuwait gas project worth $3.3bn put on hold

    16 April 2026

     

    State-owned Kuwait Gulf Oil Company’s (KGOC’s) planned tender for the development of an onshore gas plant next to the Al-Zour refinery has been put on hold due to uncertainty created by the US and Israel’s war with Iran, according to industry sources.

    The project budget is estimated to be $3.3bn, and the last meeting with contractors to discuss the project took place in Kuwait on 10 February.

    Previously, it was expected to be tendered in late March, but the tendering process was delayed due to the regional conflict and disruption to shipping through the Strait of Hormuz.

    One source said: “This tender is now effectively on hold while KGOC waits for increased stability in the region before it invites companies to bid for the contract.”

    Under current plans, the plant will have the capacity to process up to 632 million cubic feet a day of gas and 88.9 million barrels a day of condensates from the Dorra offshore field, located in Gulf waters in the Saudi-Kuwait Neutral Zone.

    Ownership of the field is disputed by Iran, which refers to the field as Arash.

    Iran claims the field partially extends into Iranian territory and asserts that Tehran should be a stakeholder in its development.

    It is believed that the Dorra field’s close proximity to Iran will make development difficult due to the current security environment.

    The offshore elements of the project are expected to be especially difficult to protect from attacks from Iran.

    In July last year, MEED reported that KGOC had initiated the project by launching an early engagement process with contractors for the main engineering, procurement and construction tender.

    France-based Technip Energies completed the contract for the front-end engineering and design.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

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

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16413221/main.png
    Wil Crisp
  • Iraq pushes to revive oil pipeline through Saudi Arabia

    16 April 2026

    Iraq is pushing to revive an oil pipeline that passes through Saudi Arabia, allowing it to diversify export routes.

    Saheb Bazoun, a spokesman for Iraq’s Oil Ministry, said the pipeline would help to insulate Iraq from any future blockades of the Strait of Hormuz, which has been largely closed since 28 February.

    The original pipeline through Saudi Arabia has not been used for more than 30 years and would need work to be done in order to bring it online.

    It is 1,568km long, extending from the city of Zubair in Iraq to the Saudi port of Yanbu on the Red Sea.

    The pipeline was built in two phases during the 1980s. The first phase stretches between Zubair and Khurais, while the second extends to Yanbu. The pipeline’s operating capacity reached over 1.6 million barrels a day (b/d).

    Following the Gulf War, the pipeline was shut down in August 1990. It has remained out of operation for decades, despite Iraq’s several attempts to restart it.

    The original pipeline project cost over $2.6bn, including storage tanks and loading terminals.

    In the wake of the US and Israel attacking Iran on 28 February, global markets have lost 11 million barrels a day (b/d) of oil supply due to the effective closure of the Strait of Hormuz.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

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

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16413290/main.jpg
    Wil Crisp
  • Algeria opens bidding for water treatment plant

    15 April 2026

     

    State-owned Cosider Pipelines, part of Algeria’s public infrastructure group Cosider, has issued a tender for the construction of a demineralisation plant in In Salah in Algeria.

    The contract covers the design, supply, installation, testing and commissioning of a plant with a treatment capacity of 62,000 cubic metres a day (cm/d).

    The tender is open to local and international companies specialising in the design and construction of demineralisation and reverse osmosis desalination plants.

    The bid submission deadline is 26 April.

    The project will be located at In Salah, a key industrial area in southern Algeria, where treated water supply is important for both municipal and industrial use.

    Cosider said that individual bidders must demonstrate that they have completed at least one reverse osmosis demineralisation or desalination plant with a capacity of 20,000 cubic metres a day or more.

    They must also show an average annual turnover of at least AD1bn ($7.7m) for their five best years over the past decade.

    For consortium bids, all partners must share full responsibility for the contract, while the lead company must meet the technical and financial requirements.

    Recent projects

    In 2023, MEED reported that Riyadh-based water utility developer Wetico had won two contracts to develop water desalination plants in Algeria.

    Societe Algerienne de Realisation de Projects Industriels (Sarpi) awarded the contract for the El-Tarf desalination plant, while Entreprise Nationale de Canalisations (Enac) is the client for the Bejaja facility.

    Both plants were commissioned in 2025, each with a production capacity of 300,000 cm/d.

    Separately, Wetico was the main contractor on a third plant commissioned last year. The Cap Dijinet 2 seawater desalination plant in Boumerdes province covers 18 hectares and also has a capacity of 300,000 cm/d.

    Like many countries, Algeria is facing pressure on resources due to longer and more frequent droughts. Seawater desalination is seen as a key driver of the government’s strategy to guarantee drinking water supply.

    According to previous reports, the government is planning to build up to six additional plants by 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16404325/main.jpg
    Mark Dowdall
  • WEBINAR: UAE Projects Market 2026

    15 April 2026

    Webinar: UAE Projects Market 2026
    Tuesday, 28 April 2026 | 11:00 GST  |  Register now

    Agenda:

    • Overview of the UAE projects market landscape
    • 2025 projects market performance
    • Value of work awarded 2026 YTD
    • Impact of the Iran conflict on the projects market and real estate, assessing supply chain disruptions, material cost inflation and war risk premiums
    • Key drivers, challenges and opportunities
    • Size of future pipeline by sector and status
    • Ranking of the top contractors and clients
    • Summary of key current and future projects
    • Short and long-term market outlook
    • Audience Q&A

    Hosted by: Colin Foreman, editor of MEED 

    Colin Foreman is editor and a specialist construction journalist for news and analysis on MEED.com and the MEED Business Review magazine. He has been reporting on the region since 2003, specialising in the construction sector and its impact on the broader economy. He has reported exclusively on a wide range of projects across the region including Dubai Metro, the Burj Khalifa, Jeddah Airport, Doha Metro, Hamad International airport and Yas Island. Before joining MEED, Colin reported on the construction sector in Hong Kong.

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16401868/main.gif
    Colin Foreman