Jeddah plans $31bn airport expansion
29 May 2023
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Jeddah Airports Company (Jedco) plans to transform King Abdulaziz International airport (KAIA) into one of the world’s largest airports with a SR115bn ($31bn) expansion plan that will increase its capacity to 114 million passengers a year.
The largest components of the plan cover the design and expansion of Terminal 1 and the construction of a new passenger terminal to be called Terminal 2.
The expected completion date for the expansion project is 2031.
Terminal plans
The Terminal 1 project comprises basic infrastructure and enabling works, the installation of new gates, air bridges and parking aprons, the extension of the automatic people mover, new baggage conveyor systems and lounges, with the goal of increasing annual passenger capacity by 15 million.
Work on the multibillion-dollar scheme is scheduled to start this year, with completion targeted for 2026.
The Terminal 2 project aims to increase the airport’s total capacity to 114 million passengers a year, almost tripling the airport’s 40 million limit today.
Due to start in 2026 and end by 2031, the project will involve constructing a completely new terminal building with dozens of gates, new taxiways, aprons, roads, utilities, and baggage handling and other software systems. It is likely to be worth in excess of $10bn to build.
Jedco is also planning to construct a fourth runway starting in 2025 and completing by 2029 to cope with the increased traffic. Due to space limitations, the new runway will require substantive infrastructure relocation work to accommodate it.
Passenger traffic-focused developments are not the only element of the plan. As part of growing the airport’s commercial proposition, the client is also due to start developing a new logistics area later this year.
Covering more than 3 square kilometres, the facility will house new customs and service buildings as well as several leasable warehouses for the private sector. Construction of the facilities will be implemented in phases with an ultimate scheduled completion date of 2029.
Concurrently, Jedco is building a new Hajj and Umrah terminal. Pilgrims comprise a large portion of passenger traffic, and the new arrivals and departures hall for budget airlines will be able to handle 15 million passengers a year. The project is expected to be completed by 2025.
Another project starting this year is the construction of a new baggage handling facility to expand the airport’s existing capacity. The building will be located next to Terminal 1 and will be integrated with the existing conveyor belt systems.
Passenger demand
The project investment programme is a result of Jedco’s forecast that annual demand will reach 114 million passengers by 2030. Of this figure, the authority estimates 51 million will come from Saudi Arabian Airlines, 21 million from international airlines, and 13 million and 12 million from budget airlines Flynas and Flyadeal, respectively.
The forecast and plans were created in conjunction with key drivers of future passenger demand in the Mecca and Jeddah region, including gigaproject real estate developers Roshn and Uptown Jeddah, air cargo handler Saudi Logistics Services (SAL), and the General Civil Aviation Authority (Gaca) with its subsidiary Matarat Holding. Engineering firms Atkins, Mace and DGJ also inputted into the process. The three companies are the consultants on the capital projects investment plan.
KAIA has three operational terminals. Opened in 2018, Terminal 1 is one of the world’s largest passenger terminals, and caters primarily for the state carrier and domestic flights. The North Terminal handles international airlines, while the Hajj Terminal is dedicated to pilgrim traffic.
Construction work on KAIA has been a key driver of airport-building activity in Saudi Arabia in the past. In 2010, there were over $7bn of contract awards for work at the airport, marking the most active year for airport construction activity on record, according to regional projects tracker MEED Projects.
There are other major airport projects planned in Saudi Arabia. In November, Saudi Arabia’s Crown Prince Mohammed bin Salman bin Abdulaziz al-Saud announced the masterplan for King Salman International airport in Riyadh. If completed on time in 2030, it will become the largest airport in the world in terms of passenger capacity.
The airport aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. For cargo, the goal is to process 3.5 million tonnes a year by 2050.
Neom airport
Another major airport is planned for Neom. US firm Aecom confirmed on 22 March that it had been awarded a contract to provide project management consultancy (PMC) services for the new airport project.
The airport will be inland, close to the Tabuk end of the 170-kilometre-long Line development. Neom International airport is separate from the Neom Bay airport, which started receiving commercial flights in 2019.
Although not confirmed, it is understood that the first phase of the airport will have the capacity to handle 25 million passengers a year. A second phase could take the capacity up to 50 million passengers a year. There is an aspiration for the airport to become the largest in the world, with a capacity of 100 million passengers a year.
Regional airports
Smaller domestic airports are also being developed. In March, Matarat signed a three-year contract with France’s Egis Group to provide technical support and project management services for 26 regional airports.
The contract aims to establish phased project management portals, update airport project management policies and procedures, and provide technical support for planning and designing.
The contract also involves following up on the implementation of capital projects with Matarat subsidiaries, including Riyadh Airports Company, Jeddah Airports, Dammam Airports and Cluster2.
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Wabag confirms $317m Saudi water deal
6 September 2024
India-headquartered VA Tech Wabag has confirmed winning a contract to build a 300 cubic-metres-a-day (cm/d) seawater reverse osmosis (SWRO) plant project in Yanbu, Saudi Arabia.
The value of the contract for the Yanbu 5 SWRO plant is $317m, the Bombay Stock Exchange-listed company said in a statement on 6 September.
The engineering, procurement, construction and commissioning contract covers the design, engineering, supply, construction and commissioning of the desalination plant.
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MEED reported in July that Wabag submitted a lower bid for the contract.
Saudi Arabia's main producer of desalinated water, SWA – formerly Saline Water Conversion Company (SWCC) – received two bids in May for the contract to build the Yanbu 5 SWRO project.
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Chinese companies win 95% of all Iraqi energy projects
6 September 2024
Commentary
Wil Crisp
Oil & gas reporterCompanies headquartered in China have won 95% of all major project contracts awarded in Iraq’s oil, gas, chemicals and power sectors so far this year, as they increase their dominance in the market.
A total of $12.1bn in energy project contracts were won by Chinese companies during the first eight months of 2024, according to data gathered by regional project tracker MEED Projects.
The only major award so far this year that was not won by a company or partnership that was 100% Chinese, was the contract to rehabilitate the Baiji 2 gas-fired power station, which is estimated to be worth $1.3bn by MEED Projects.
This contract was awarded to a consortium of Beijing-headquartered China State Construction Engineering Corporation (CSCEC) and German technology conglomerate Siemens.
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“The huge presence that China has in the country’s energy sector is a source of concern for Iraq’s leadership, which doesn’t want to cede control of so many important infrastructure projects to companies from any single country.”
“The problem is, other countries are reluctant to take on the risks of doing business in Iraq and at the same offer the competitive prices that Chinese contractors can offer.”
The biggest energy project contract won by a Chinese contractor so far this year is the agreement for the development of the Al-Faw Investment Refinery project.
The client on the project, state-owned Southern Refineries Company, signed a contract with CSCEC in May this year.
The refinery will have a capacity of 300,000 barrels a day and will produce oil derivatives for both domestic and international markets.
The project will be carried out in two stages. The first phase will involve refining operations, while the second will involve constructing a petrochemicals complex with a capacity of 3 million tonnes a year.
The wider project also includes the construction of a 2,000MW power plant and the establishment of the Al-Faw Academy for Refinery Technology, to train 5,000 Iraqi workers that will eventually work at the facility.
Hualu, a subsidiary of China National Chemical Engineering Company (CNCEC), signed a preliminary principles agreement for the project in December 2021.
At the time, Iraq’s Oil Ministry said that the project would have an investment value of $7bn-$8bn.
MEED Projects has estimated that the contract value of the deal signed with CSCEC in May for the refinery project is about $4bn.
Other energy project contracts won by Chinese companies during the first eight months of this year included the contract for the Artawi 1,000MW photovoltaic solar power plant in Basra.
This contract, estimated to be worth $1bn, was awarded to China Energy Engineering International Group.
Chengdu-based DongFang Electric Corporation was awarded the main contract for a project to convert the Baghdad South power plant into a combined-cycle gas turbine power plant.
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Strong performance
Chinese contractors also performed well in Iraq’s energy sector in terms of the value of contract awards in 2023.
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Looking at the data for 2023 and the first eight months of 2024 together, Chinese companies won $14.5bn in contracts, 82% of the $17.6bn in energy project contracts awarded over the period.
The second closest competitors were companies from Germany, which won just over $1bn in contracts, 6% of all awards.
Iraqi companies were third, winning $816m in contracts, according to the data compiled by MEED Projects.
Contracts were also won by companies from Italy, the Netherlands and Turkiye.
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Abdel-Ghani said that he will be specifically targeting US companies in the upcoming round.
Earlier this year, the US international oil and gas company ExxonMobil completed its exit from Iraq’s West Qurna-1 oil field, handing over operatorship to PetroChina.
Exxon’s plan to exit the West Qurna-1 oil field was first announced in April 2021, when Iraq’s Oil Ministry said the US-based oil company was considering selling its 32.7% stake.
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Region plugs in to electric future
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EditorRead the September 2024 issue of MEED Business Review
Saudi Arabia is well known as one of the world’s largest oil exporters. What is less known is that the kingdom is also one of the world’s most significant consumers of oil.
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Must-read sections in the September 2024 issue of MEED Business Review include:
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Analysis of the outlook for the downstream sector
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> Region advances LNG projects with pace> SAUDI GIGAPROJECTS: Communication gaps hinder Saudi gigaprojects
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> LEADERSHIP: Navigating the impact of digital currencies on forex markets
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> COMMENT: Kuwait’s prospects take positive turn
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> BANKING: Kuwaiti banks hunt for growth
> OIL & GAS: Kuwait oil project activity doubles
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> Harris-Walz portents shift in US policy on Gaza
> Aramco increases spending despite drop in profits> GULF PROJECTS INDEX: UAE leads slight dip in market
> JULY 2024 CONTRACTS: Saudi Arabia boosts regional total again
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> OPINION: The beginning of the end
> BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts
To see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/12460011/main.gif -
PIF and Hyundai award car plant construction deal
5 September 2024
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Saudi Arabia's sovereign wealth vehicle, the Public Investment Fund (PIF), and South Korea's Hyundai Motor Company have awarded the contract to build a vehicle manufacturing plant in Saudi Arabia.
According to media reports, the firms awarded an estimated $248m contract to Seoul-headquartered Hyundai Engineering & Contracting.
Construction of the plant is expected to start in 2024, and vehicle production in 2026.
The facility will have a production capacity of 50,000 vehicles a year, including both conventional vehicles and electric vehicles (EVs).
MEED reported in November last year that Hyundai Motor Company had appointed Seoul-headquartered Heerim Architects as the design consultant for its vehicle manufacturing plant in Saudi Arabia.
PIF and Hyundai Motor Company signed a joint venture agreement to set up a vehicle manufacturing plant in the country in October last year.
The PIF will hold a 70% share in the joint venture, with Hyundai holding the remaining 30% stake. The total investment for the project is estimated to be about $500m.
In December 2022, Saudi Arabia's Industry & Mineral Resources Ministry signed a memorandum of understanding with Hyundai Motor Company to establish a car production plant in the kingdom.
The PIF is keen to invest in the kingdom's automotive sector. Last year, it launched the National Automotive & Mobility Investment Company (Tasaru Mobility Investments) to develop the local supply chain capabilities for the automotive and mobility industry in Saudi Arabia.
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