meed-logo

line1 line2 line3
SIGN IN / REGISTER

Gaza conflict casts shadow over energy projects

9 October 2023

Analysis
Wil Crisp
Oil & gas reporter

Israel’s declaration of war against Hamas has increased uncertainty over planned oil and gas projects in the region and could lead to long delays and even the cancellation of some significant projects.

The projects at risk include oil and gas projects off the coast of Gaza, in Cyprus, Egypt and Lebanon.

One project likely to see severe delays or cancellation is the planned development of the Gaza Marine gas field.

In June, the Israeli government issued preliminary approval to develop the Gaza Marine project, 30 kilometres off the coast of Gaza, the Palestinian enclave controlled by Hamas.

Talks to push forward the development of the Gaza Marine gas field have been mediated by Egypt and attended by officials from both the Palestinian Authority and Israel.

The Gaza Marine field is estimated to hold more than 1 trillion cubic feet of natural gas.

The Gaza Marine field was discovered at the end of the 1990s and development has already been delayed several times due to conflict between Israel and Palestine.

Although the field is not large compared to others discovered in the Mediterranean, it is expected to generate about $7bn in revenues if developed.

The field is expected to produce 1.5 billion cubic metres of gas a year over 20 years.

Lebanese oil and gas

There is also potential for the conflict between Israel and Hamas to disrupt offshore oil and gas projects in Lebanese waters near the Israeli border.

Israel conducted artillery strikes across its UN-patrolled border with Lebanon after Hezbollah launched guided missiles and artillery shells in the contested Shebaa Farms border area on 8 October.

The rapid deterioration in relations between the two countries could awaken the conflict over shared maritime boundaries that was seemingly resolved last year, allowing Lebanon to start exploratory drilling for oil in formerly disputed territories that lie close to Israeli waters.

In August, a drilling rig arrived in Lebanon’s Block 9 to begin oil and gas exploration.

The exploration is being conducted in Lebanon’s Block 9 by a consortium led by France’s TotalEnergies. It includes the Italian oil company Eni and state-owned QatarEnergy.

Qatar Energy replaced Russian company Novatek, which withdrew from the Lebanese market in September.

The drilling became possible after a deal in 2022 that delineated the Lebanon-Israel maritime border for the first time, despite Beirut still considering itself at war with its neighbour and laws barring contact with Israeli officials.

Block 9 lies mostly in Lebanese waters, but a segment lies south of the newly delineated border.

As part of the deal, signed on 27 October 2022, a mechanism for the consortium to exploit possible discoveries that extend south from Block 9 was established, setting up a royalties system for Israel while the exploitation would be on behalf of Lebanon.

Experts have argued that the absence of specific criteria for profit distribution is one of the biggest loopholes in the deal in the event of cross-border deposits being identified.

Aphrodite gas field

The deterioration in relations between Israel and its Arab neighbours has created increased uncertainty over plans for a subsea pipeline connecting the Aphrodite natural gas field, located off the coast of Cyprus, to Egypt.

In May this year, partners in the Aphrodite natural gas field, which include Israel’s NewMed Energy, announced they were seeking approval from the Cypriot government to build the subsea pipeline that would link to an existing processing and production facility in Egypt.

At the time, Israel’s NewMed Energy, formerly Delek Drilling (part of Yitzhak Tshuva’s Delek Group), which owns a 30 per cent stake in the Aphrodite field, said it had presented the Cypriot government with an updated plan for the development of the reservoir, including natural gas processing and production.

The other partners in the Aphrodite gas field, which holds an estimated 124 billion cubic metres of gas, are US energy giant Chevron and Shell, each owning a 35 per cent share.

The Aphrodite gas field was discovered by the A-1 well in September 2011 and is estimated to hold 4.5 trillion cubic feet of recoverable reserves.

Israel claims that part of the field lies in Israeli waters. Although talks have made headway over recent years, the dispute has not yet been completely settled with a signed agreement.

A formal resolution to the border dispute with Israel will be needed to gain significant ground on the project to develop the Aphrodite field.

If the progress towards the resolution is overturned in the wake of the latest round of conflict between Hamas and Israel, then that would be a major setback to Cyprus’ plans to export gas to Europe.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11202874/main.gif
Wil Crisp

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

Click here to register
Exclusive from Meed
Related Articles
  • Acwa signs Mauritania gas IPP agreements

    2 July 2026

    Saudi Arabia's Acwa has announced it has signed the public-private partnership (PPP) and power purchase agreement (PPA) for the 230MW N'diago combined-cycle gas turbine (CCGT) power plant in Nouakchott, Mauritania.

    The agreements cover the development, financing, construction and operation of the project. They were signed in Nouakchott  in the presence of senior officials from the Mauritanian government and Acwa chairman Mohammad Abunayyan.

    The project is Mauritania's first large-scale gas-fired independent power project (IPP). It is also expected to be the country's first major gas-fired power plant procured through a PPP structure.

    The CCGT plant will provide 230MW of baseload generation capacity. It will use Mauritania's domestic natural gas resources to supply the national grid.

    Sepaarately, the Mauritanian Electricity Company (Somelec) has been advancing procurment for the construction of a 50MW solar power and battery enery storage systems (Bess) IPP project. In May, it issued an expression of interest (EoI) request.  

    Mauritania currently has several wind and solar power projects in the early study stages, according to regional project tracker MEED Projects.

    There are also plans to build a 1,200MW wind power plant near port Etienne in the bay province of Nouadhibou, for which, China Energy Engineering was appointed as the main contractor in 2024. 

    Meanwhile, Acwa's portfolio comprises 111 assets that are operational, under construction or in advanced development. These represent investments of SR468.9bn ($125bn).

    According to the company, it has a power generation capacity of 98GW, including 52.3GW of renewable energy, and manages 9.7 million cubic metres a day of desalinated water globally.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17525605/main.jpg
    Mark Dowdall
  • Saudi water sector awaits next catalyst

    2 July 2026

    Commentary
    Mark Dowdall
    Power & water editor

    Saudi Arabia’s water sector is entering a critical period as developers and investors wait for the next signal that the kingdom’s project pipeline is moving forward.

    Seven months have passed since preferred bidders were announced for the Arana and Hadda independent sewage treatment plant (ISTP) projects, which together will provide 350,000 cubic metres a day (cm/d) of treatment capacity. The projects had been expected to reach financial close in the second quarter of this year, but have yet to do so.

    In parallel, Saudi Arabia’s Vision Invest was selected as preferred bidder last December for the estimated $2bn Riyadh-Qassim independent water transmission pipeline (IWTP) project. It was reported at the time that the company had submitted a levelised tariff of SR2.627 ($0.70) a cubic metre, almost 20% below the next nearest bid. The project, which will comprise an 859-kilometre pipeline with transmission capacity of 685,000 cm/d, had been tipped to reach financial close this quarter.

    The uncertainty extends beyond projects awaiting financial close. The developer tender bid deadline was recently pushed back again for the $150m Riyadh East ISTP. Meanwhile, Saudi Arabia’s Water Transmission Company (WTCO) is understood to be reviewing the delivery model for the Jubail-Buraidah and Ras Mohaisen-Baha-Mecca independent water transmission system (IWTS) projects.

    According to sources familiar with the plans, WTCO is considering establishing a special purpose vehicle that would take equity stakes in both schemes. This could further delay procurement for a project that has already seen multiple deadline extensions. Sharakat’s next wave of independent water projects (IWPs) is also in the pipeline. The first of these is not expected to be tendered until early 2027.

    According to regional project tracker MEED Projects, Saudi Arabia’s water infrastructure sector recorded $3.14bn-worth of awards in the first half of this year, substantially lower than the $7.58bn recorded during the same period in 2025.

    While activity has slowed, the longer-term outlook remains unchanged. Population growth and industrial expansion continue to drive demand for desalination, wastewater treatment and water transmission infrastructure. In the meantime, key stakeholders are looking for the next clear signal that the project pipeline is regaining momentum.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17510220/main.jpg
    Mark Dowdall
  • Contractor wins Jeddah road expansion deal in Riyadh

    2 July 2026

     

    The Royal Commission for Riyadh City (RCRC) has awarded a contract for the Jeddah Road Development Project in Riyadh.

    Local construction firm Saudi Pan Kingdom (Sapac) won the contract.

    Spanning 29 kilometres, the scheme includes 14 bridges and five lanes.

    Designed to handle up to 353,000 vehicles a day, the road is expected to be completed by 2028, with mobilisation works already under way.

    The project forms part of the third package of the RCRC’s Riyadh Main and Ring Road Axes Development Programme, which was announced in January.

    The other schemes include:

    > Taif Road Development Project: The project stretches 15km and includes four bridges, each with four lanes. It also features two tunnels. It will have a capacity of up to 200,000 vehicles a day and will enhance connectivity between Riyadh’s southern and western districts and the city centre.

    > Thumamah Road Development Project: The eastern section of the project will span 8km and include three bridges and three tunnels, linking the northern and eastern parts of Riyadh. The project will have a daily capacity of up to 200,000 vehicles.

    > King Abdulaziz Road Development Project: The northern section of the project stretches 4.7km and will include four bridges, four lanes and one tunnel, with a capacity of up to 450,000 vehicles per day.

    > Othman Bin Affan Road Development Project: The northern section will span 4.3km and include seven bridges and other related upgrades to enhance traffic flow across northern Riyadh. The project will have a daily capacity of up to 500,000 vehicles.

    > Second phase of engineering enhancements for congested areas: This project targets eight locations across the city’s road network, where advanced engineering solutions will be applied to reduce congestion and improve intersection performance, increasing traffic capacity by 40% to 60%.

    The contract for the Jeddah Road Development Project is the latest of several high-profile deals awarded by the RCRC recently. In May, it awarded an estimated SR5bn ($1.3bn) contract to construct the Sheikh Jaber Al-Sabah Road project in Riyadh.

    That contract went to a joint venture of Riyadh-based Al-Rashid Trading & Contracting Company (RTCC) and Turkiye’s IC Ictas.

    Stretching 12km, the project runs from Khurais Road to Al-Thumama Road and is a key component of the Second Eastern Ring Road scheme.

    Works include five interchanges: Prince Bandar, King Abdullah, Imam Abdullah, Dammam Road and Al-Thumama.

    In 2021, Saudi Arabia’s Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud said the population of Riyadh would double to 15-20 million people by 2030. 

    He directed government entities to work closely with the RCRC to prepare the city’s development strategy.

    The RCRC’s major projects include Riyadh Metro, Riyadh Art, Sports Boulevard, King Salman International Park, Green Riyadh and several road development projects in the capital.

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

    Stress 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:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17523376/main.jpg
    Yasir Iqbal
  • Dubai announces First Al-Khail road development project

    2 July 2026

    Register for MEED’s 14-day trial access 

    Dubai’s Executive Council has announced the First Al-Khail Street Development project, which will run parallel to Sheikh Zayed Road.

    The scheme comprises a 15-kilometre elevated carriageway with three lanes in each direction.

    According to a Dubai Media Office statement, “The project will provide access to areas including Al-Barsha, Al-Quoz, Business Bay and Meydan.”

    “It is expected to serve more than 2.6 million people and reduce travel time on Sheikh Zayed Road by 51% during peak hours,” the statement added.

    Designed to accommodate more than 9,000 vehicles an hour, construction is expected to begin in the third quarter of 2027, with completion targeted for 2030.

    The development forms part of a wider AED18bn ($5bn) programme covering initiatives related to culture, trade, infrastructure, Emiratisation, finance, investment, urban planning and the city’s population census.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17523587/main.jpg
    Yasir Iqbal
  • Contractors submit Saudi Landbridge Riyadh section bids

    2 July 2026

     

    Contractors submitted proposals on 30 June for a design-and-build contract to construct the Riyadh Rail Link, a new north-to-south railway line across the capital.

    The scope includes a 35-kilometre double-track line connecting SAR’s North-South Railway to the Eastern Railway network.

    Issued on 29 January, the tender also covers the procurement, construction and installation of associated infrastructure, including viaducts, civil works, utility diversions/installations, signalling systems and other related works.

    Once delivered, the Riyadh Rail Link is expected to become a key component of the Saudi Landbridge railway.

    In January, SAR said it would deliver the Saudi Landbridge project through a “new mechanism” by 2034, after failing to reach an agreement with a Chinese consortium to construct it, as MEED reported.

    In an interview with local media, SAR CEO Bashar Bin Khalid Al-Malik said the consortium failed to meet local content requirements, and that the project would instead be delivered in several phases under a different procurement model.

    Negotiations have been under way between Saudi Arabia and China-backed investors interested in developing the scheme through a public-private partnership (PPP). Al-Malik put the project cost at about SR100bn ($26.6bn).

    Overall, it comprises more than 1,500km of new track. A core element is a 900km railway between Riyadh and Jeddah, providing the capital with direct freight access to King Abdullah Port on the Red Sea.

    Other key elements include upgrading the existing Riyadh-Dammam line, a bypass around the capital known as the Riyadh Link, and a connection between King Abdullah Port and Yanbu.

    The Saudi Landbridge is one of the kingdom’s most anticipated project programmes. First announced in 2004, it was put on hold in 2010 before being revived a year later. Rights-of-way issues, route alignment and the high cost have been among the main stumbling blocks.

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

    Stress 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:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17522174/main.jpg
    Yasir Iqbal