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• 
  Carbon capture path for thermal plants still elusive

  23 October 2024

  The decarbonisation path for upcoming thermal power plants across the GCC region remains vague, according to industry sources.

  Both clients and utility developers are understood to be exploring options to include carbon capture, utilisation and storage (CCUS) provisions in ongoing and upcoming tenders for developing gas-fired power plants in line with their net-zero carbon emissions targets.

  Several independent power projects  (IPPs) in Abu Dhabi and Saudi Arabia as well as independent water and power projects (IWPPs) in Qatar and Kuwait have looked, or are looking at, available options, two sources said.

  "So far, the only option at the table appears to be that the offtaker and the project company implementing the scheme agree to achieve decarbonisation of a power plant asset at a specific time, mainly by 2049," one of the sources said. "If not, the international developer reserves its right to leave the project company."

  Most European and Japanese utility developers and investors have a target to achieve net-zero carbon emissions between 2045 and 2050. 

  Regional utilities and offtakers such as Abu Dhabi's Emirates Water & Electricity Company (Ewec), Saudi Power Procurement Company (SPPC), Qatar's General Electricity & Water Corporation (Kahramaa), Kuwait's Ministry of Electricity, Water and Renewable Energy (Mewre) and Bahrain's Electricity & Water Authority (Ewa) have either thermal IWPP or IPP schemes that are under tender or about to be awarded.

  These entities have specified parameters related to carbon-capture or CCUS in their recent and upcoming tenders.

  Commercial viability

  Introducing CCUS in utility assets, particularly for combined-cycle gas-turbine plants (CCGTs), is becoming a high priority for both offtakers and developers, although there is less certainty on how and when integrating the solution will become commercially viable.

  In a recent interview with MEED, Tomaz Guadagnin, Engie’s managing director for Flex Gen in Asia, Middle East and Africa, said building a power station with CCUS today requires significantly bigger land and capital expense as the asset will require additional gas turbine exhaust systems, among others.

  As such “it is an important requirement that predictability of the operation of that product is provided”.

  Guadagnin says it is key for international developers to consider that these factors need to be built into the tariffs so that companies can reach a financial investment decision.

  It is also imperative that developers and offtakers understand what is going to be done with the captured carbon dioxide.

  “What will be done with the captured CO2, where does it fit in, how is it transported and the work required around that and its utilisation. We still don’t have clear visibility on how these will materialise,” the executive noted.

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  Jennifer Aguinaldo
• 
  Adnoc’s upstream goals drive spending spree

  23 October 2024

  

   

  Abu Dhabi National Oil Company (Adnoc Group) spent close to $22bn last year on upstream projects – mainly on the $17bn Hail and Ghasha sour gas production project – making it one of the best years on record for oil and gas project spending in the UAE.

  While the energy giant may not be able to match its 2023 level of capital expenditure (capex) on oil and gas production projects this year, total capex on upstream oil and gas projects in 2024 is still expected to be steep, as Adnoc strives to attain an oil production capacity of 5 million barrels a day (b/d) by 2027 and become self-sufficient in gas production by the end of this decade.

  In fact, if the Hail and Ghasha gas programme is put to one side, Adnoc has already exceeded last year’s upstream project spending level this year.

  Key offshore projects awarded

  Adnoc Group subsidiary Adnoc Offshore has been a driving force behind upstream project spending in the UAE this year, awarding engineering, procurement and construction (EPC) contracts for projects to increase the oil production potential of the Upper Zakum and Lower Zakum offshore oil field developments.

  Located 84 kilometres (km) offshore in Abu Dhabi, Upper Zakum is the world’s second-largest offshore oil field and fourth-largest oil field. Adnoc Offshore launched the first phase of the programme to raise Upper Zakum’s oil production capacity to 1.2 million b/d in 2019. The initial goal was to increase the field’s output potential to 1 million b/d by 2024, which was later increased to 1.2 million, with the project execution timeline eventually being extended.

  This target is to be achieved through the UZ 1.2MMBD EPC-1 project. In April, Adnoc Offshore awarded the main EPC contract for the project, worth $825m, to UAE-based Target Engineering Construction Company.

  Separately, Adnoc Offshore and its partners in the Lower Zakum concession – located 65km northwest of Abu Dhabi – intend to sustain oil production from the asset at its current level of 450,000 b/d until 2025, and then increase output to 470,000 b/d.

  To this end, Adnoc Offshore awarded the main contract for a project known as the Lower Zakum Early Production Scheme 2 and Proved Developed Producing to Abu Dhabi’s NMDC Energy in the second quarter.

  Onshore project spending

  The onshore business of Adnoc Group, Adnoc Onshore, has also been a major spender this year as it pushes ahead with projects earmarked for its parent company’s 5 million b/d target. In September, Adnoc Onshore awarded a contract, estimated to be worth $900m-$1bn, for a project involving the modification of wells at the Bab onshore oil field development in Abu Dhabi, to boost the asset’s crude production potential.

  Abu Dhabi-based Robt Stone Middle East won the contract for the project, which is the second phase of a campaign by Adnoc Onshore to provide artificial lift to 184 new and existing wells at the Bab field’s seven reservoirs. Providing artificial lift to wells will help improve oil recovery from the reservoirs, sustain an oil production level of 485,000 b/d from the field and increase output beyond 2028.

  Earlier in the year, Adnoc Onshore awarded main contracts worth a total of over $1.5bn for two packages on a project involving the conversion of wells and the installation of associated tie-ins at the South East cluster of oil fields in Abu Dhabi.

  Package three of the project covers the EPC of well tie-ins and other associated structures at the Asab and Sahil oil fields, while package four covers the Shah, Qusahwira and Mender fields. Adnoc Onshore split the scope of work on the packages and appointed two contractors for each package.

  Project capex on the rise

  Adnoc Group’s upstream subsidiaries are expected to award further project contracts before the end of the year in order to stay on top of their targets.

  Adnoc Offshore is set to award a major contract estimated to be worth $2bn for a project to increase production from the Umm Shaif offshore oil field in Abu Dhabi. US-based oil and gas contractor McDermott International is in line to win the main contract for the Umm Shaif Accelerated Development project.

  The project aims to increase the Umm Shaif oil field’s output from about 275,000 b/d at present to 390,000 b/d by 2027, and to sustain that level of production until at least 2036.

  Meanwhile, Adnoc Offshore could also award the main EPC contract for the multibillion-dollar Lower Zakum Long-Term Development (LTDP-1) project by the end of the year. The goal of the project is to raise the asset’s output capacity to 520,000 b/d by 2027 and maintain that level until 2034.

  Contractors submitted technical bids for the Lower Zakum LTDP-1 project in August and are in the process of preparing commercial bids.

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  Indrajit Sen
• 
  Biden leaves a mixed legacy

  23 October 2024

  Commentary
  Edmund O'Sullivan
  Former editor of MEED

  There’s no forecasting the winner of this year’s US presidential poll, but there is one certainty.

  Joe Biden will exit the White House next January and be out of front-line politics for the first time in more than five decades.

  History is rarely kind to presidents after they leave office. It is likely that, in due course, Biden will be remembered most for being the oldest person elected president. And he joins the small group of US presidents forced out of office, as he effectively was.

  Biden’s fans will point to significant domestic achievements, including the decrease in the number of Americans without health insurance for the first time to under 10% of the population. Job growth in Biden’s first three years outperformed any previous president’s and unemployment in 2021-23 was below 4% for the first time since the 1960s. Wage growth has outstripped inflation, which has dropped sharply since hitting almost 10% in the summer of 2022. The stock market has boomed and violent crime is down.

  History is rarely kind to presidents after they leave office

  Biden’s big domestic negative is immigration. The number of encounters at America’s border with Mexico has soared and hit a record of 2.2 million in 2023. 

  Biden’s apologists blame the Republican majority in the House of Representatives for derailing reform legislation that was making its way through the Senate. But worries about immigration damaged his opinion poll ratings.

  In a normal election, nevertheless, a presidential incumbent with this kind of record should have been a shoo-in. It is the main reason Biden resisted pressure to step down even after his cognitive decline was impossible to conceal. He believed he was doing a good job and should have been allowed to stay on.

  Foreign policy

  Outside the US, Biden’s reputation will mainly be shaped by his foreign policy.

  The record there is baleful. The chaos of the withdrawal from Afghanistan in 2021 was followed by a refusal to negotiate with Russia about Ukraine in 2022 and the lamentable failure to constrain Israel since October 2023.

  His Secretary of State Antony Blinken is widely viewed as the worst in US history.

  Reliable friends including Jordan and most of the Gulf Arab states have been alienated, possibly permanently.

  Biden’s legacy is objectively mixed. But that’s no longer his problem.

  The US foreign policy mess will divert much of the initial energy of America’s next president. But the ultimate sadness of Biden’s lifetime of public service is that, whoever wins in November, they will almost certainly blame him for it.

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  Connect with Edmund O’Sullivan on X

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  More from Edmund O’Sullivan:

  > Desperate days drag on
  > The beginning of the end
  > The death of political risk
  > Italy at centre of new reduced Europe
  > US foreign policy approach remains adrift
  > Rainmaking in the world economy
  > New shock treatment for Egypt’s economy
  > Syria’s long march in from the cold
  > Lebanon’s pain captured in a call from Beirut
  > Troubled end to 2023 bodes ill for stability

  ---

  

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  Edmund O’Sullivan
• 
  Jeddah Municipality retenders stormwater tunnels

  23 October 2024

  

   

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  Jeddah Municipality has retendered a contract to construct the King Abdullah Road-Falasteen Road (Kafa) tunnel within the Jeddah city area in the Mecca region of Saudi Arabia.

  MEED understands that the tender was issued in late September with a bid submission deadline of 16 November.

  The Kafa tunnel is being developed in two phases. The first phase involves the construction of two tunnels.

  The three-year scheme involves constructing 5.33 kilometres (km) of tunnels with an internal diameter of 7.2 metres using tunnel boring machines (TBMs) and another 3.43km of tunnels with a diameter of 3.5 metres driven by pipe jacking or TBMs.

  The scope of phase two includes constructing a terminal pumping station, a marine outfall and all necessary online and offline shafts.

  Jeddah Municipality invited contractors to prequalify for the contract to build the tunnels in March last year. It is understood the client received responses to the request for qualifications in June.

  US-based Aecom is the consultant for the project.

  The works for Kafa package one will be located along King Abdullah Road and the surrounding roads, including Prince Majid and part of Bani Malik.

  Ground conditions have been an ongoing issue for contractors working in Jeddah for many years. The client has cautioned that TBMs must be “suitable for highly variable ground conditions from stable very-hard rock to soft water-bearing ground or vice versa without any addition”.

  It added: “The TBM shall be flexibly designed to adapt to changing ground in terms of supporting and excavation methods, requiring short conversion times within the tunnel alignment, ensuring optimum safety and flexibility during the entire tunnelling process.”

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  Yasir Iqbal
• 
  Aedas confirms Egypt Ras El-Hekma development role

  23 October 2024

  Register for MEED's 14-day trial access 

  Hong Kong-headquartered architectural firm Aedas has confirmed that it is working on the overall masterplan for the Ras El-Hekma project, a planned new city on Egypt’s Mediterranean coast.

  Aedas has been appointed by Abu Dhabi-based developer Modon Holding, who will act as the master developer for the entire development, which covers more than 170 million square metres (sq m).

  Modon Holding will develop the first phase of the project, covering 50 million sq m.

  The remaining 120 million sq m will be developed in partnership with private developers under the supervision of the recently established ADQ subsidiary Ras El-Hekma Urban Development Project Company and Modon Holding.

  MEED reported earlier this month that Abu Dhabi-based holding company ADQ had appointed Modon Holding as the master developer for its Ras El-Hekma project.

  Several project agreements were signed this month during a ceremony attended by the presidents of the UAE, Sheikh Mohamed Bin Zayed Al-Nahyan, and Egypt, Abdel Fattah El-Sisi.

  Ras El-Hekma is on a spur of land on Egypt’s northern Mediterranean coastline, about 240 kilometres west of Alexandria.

  The greenfield development is planned as a combined business and leisure destination, with hotels, leisure facilities, a free zone, a financial district and residential components.

  The master development has been billed as having the potential to attract over $150bn in investment.

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  Yasir Iqbal