Saudi leads MEED’s latest economic activity index
31 January 2023
Saudi Arabia has continued to sit atop the MEED Economic Activity Index with the close of 2022, as its repeat of another bumper year of project contract awards set it well clear of the next most competitive regional projects market.
The index has generally seen the division between energy exporters and importers sharpen, with the former enjoying current account and, for the most part, fiscal surpluses, and the latter invariably facing trade deficits and persisting fiscal deficits.
High inflation, compounded by rising interest rates and high fuel prices, continues to erode economic prospects in the region. It has also pressured the finances of countries with artificially high currency pegs. Egypt has been forced to drop its currency peg three times in the past year, leaving it increasingly at the mercy of inflation.
Saudi Arabia stands largely apart from these pressures as the region’s largest oil producer. Its inflation rate in 2023 is projected by the IMF to be a minimal 2.2 per cent. While its rate of real GDP growth is expected to come down from 7.6 per cent in 2022 to 3.7 per cent in 2023, this remains high amid the glum projections that up to a third of the global economy could enter recession this year.
Together with the UAE, Qatar, Kuwait and surprisingly Iraq, Saudi Arabia is expected to maintain a double-digit current account surplus in 2023, as well as a fiscal surplus, despite the kingdom’s rising project spending.
There is a further $95bn-worth of project value in the bidding stage [in Saudi Arabia], boding well for the potential of 2023 to be another bumper – if not record – year for the Saudi contracting sector
Project potential
Saudi Arabia’s project market maintained its momentum in 2022, seeing the award of 53bn-worth of project value, 1.3 per cent more than in 2021 and 46 per cent higher than the annual average over the preceding five years.
The award figure also exceeded the value of projects coming to completion over the course of the year by $21bn – a strong net positive result for the market.
There is a further $95bn-worth of project value in the bidding stage, boding well for the potential of 2023 to be another bumper – if not record – year for the Saudi contracting sector.
Mixed performances
The UAE, while retaining the second position in the index, has seen its score slip. Despite having strong real GDP growth and fiscal projections for 2023, the country remains well down from historic highs – the $18.7bn-worth of project awards in 2022 was just 53 per cent of the $35.1bn average in 2017-21. The market also shed $20bn in value as completions outstripped awards.
The $56.4bn of projects in bidding and due for award in 2023 makes the prospect of a turnround a possibility, but there is no guarantee given the global uncertainty.
Qatar has meanwhile risen strongly in the index since the third quarter of 2022, despite a real GDP growth projection by the IMF of just 2.4 per cent in 2023 – as the boost to non-oil GDP from the Fifa World Cup wears off.
Qatar’s project awards also fell in 2022 following a spike in 2021. The $14bn of awards in 2022 nevertheless remained almost level with the five-year average.
Kuwait also has a slightly lower real GDP projection in 2023, but strong overall fundamentals. Project activity also continues to tick over in the country, albeit at a slower than usual pace. The country has $27.6bn-worth of projects in the bid stage – a figure nearly 10 times the $2.8bn-worth of awards in 2022, which fell well below the $5.6bn average for the preceding five years.
The remaining GCC nations, Oman and Bahrain, and another Gulf energy exporter, Iraq, all also boast healthy current account surpluses. From there however, the countries diverge.
Oman is in a much better position heading into 2023, having stabilised its fiscal situation and eliminated its deficit. The country also has the lowest forecast consumer price inflation rate in the region heading into 2023, at just 1.9 per cent. Furthermore, the country has a burgeoning $19.7bn-worth of projects in the bid stage that could soon bolster its projects market.
Bahrain continues to struggle with both a persisting fiscal deficit and a debt burden – equivalent to about 120 per cent of its GDP. The country’s projects market slumped in 2022, with the less than $1bn of contract awards compared to $2.6bn in completions.
Iraq remarkably sits just below the GCC countries in the index thanks to its oil-fuelled GDP growth and twin double-digit current account and fiscal surpluses. Iraq’s project activity nevertheless fell away in 2022, which saw just $5bn-worth of awards – compared to $17bn the previous year and a $12bn five-year average. The $28bn-worth of projects in the bidding stage could nevertheless make for better things to come.
Egypt’s projects market has recently been in the ascendant, but its broader economic fortunes are now in sharp decline. The full impact of the country’s currency crisis has yet to be revealed, but Cairo already has twin current account and fiscal deficits.
Iraq remarkably sits just below the GCC countries in the index thanks to its oil-fuelled GDP growth and twin double-digit current account and fiscal surpluses
Facing challenges
Algeria, Morocco, Jordan and Tunisia are all struggling to break even in the current economic climate and have double-digit unemployment. This is ironic in the case of Algeria, which is an energy exporter with a current account surplus and yet double-
digit fiscal deficit.
Below this, Iran continues to be hampered by sanctions, creeping economic malaise and an estimated 40 per cent consumer price inflation rate amid a steadily collapsing import subsidies regime.
Libya, despite resurgent oil growth, has nearly 20 per cent unemployment and 50 per cent youth unemployment due to the civil war. Reconstruction efforts in the country also showed signs of stalling in 2022 as the project award value dropped off, with many projects stuck in the bid stage.
Yemen and Lebanon close out the index with dismal economic performances due to their respective ongoing conflict and economic crisis. Remarkably, with almost one-in-three out of work and unchecked inflation, Lebanon is managing to underperform even Yemen.
About the indexMEED’s Economic Activity Index, first published in June 2020, combines macroeconomic, fiscal, social and risk factors, alongside data from regional projects tracker MEED Projects on the project landscape, to provide an indication of the near-term economic potential of Middle East and North African markets. |
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Operational resilience is now the Gulf’s real energy test
7 April 2026
For the past few weeks, the Gulf energy story has been told mostly through the lens of damage. That is understandable. We have seen attacks on industrial sites, ports and tankers, while the Strait of Hormuz remains the key constraint on exports and recovery. Around a fifth of global oil normally passes through the strait, and the latest attacks have again underlined how exposed regional and global markets remain to disruption in that corridor.
But the more useful question now is not simply what has been hit. It is what still works, what can be rerouted, and how fast operators can adjust.
Impact scale
The current estimate is that the physical impact of this conflict now likely exceeds the energy industry impairments sustained during the 1990-91 Gulf War, including both physical damage and business interruption. This is a serious shock, and it will feed through into global inflation, insurance pricing, financing costs and downstream supply chains.
This is why the story extends beyond oil and gas. Metals, aluminium and petrochemicals are part of the same resilience test. In energy-intensive industries, even a short interruption to power or logistics can create outsized losses. Aluminium is a clear example. Once power is curtailed for too long, the restart problem becomes expensive very quickly.
But that does not mean the Gulf’s energy system has been structurally broken. A great deal of productive capacity, logistics infrastructure and operational capability remains in place. The real question is not whether the region can function at all, but how far operators can adapt, reroute and preserve output while the disruption continues.
The physical impact of this conflict now likely exceeds the energy industry impairments sustained during the 1990-91 Gulf War
What gives me some confidence is that the region is not standing still. Good operators are doing what good operators tend to do under pressure. They are changing production plans, prioritising domestic demand where needed, rerouting logistics and shifting product slates. In petrochemicals, some producers can move from liquid output to solid output, which is easier to truck overland and export through alternative routes. In plain terms, they are trying to keep molecules moving.
Others are bringing planned maintenance forward. If an asset cannot export efficiently today, using this period for a turnaround can preserve future production once routes reopen. That does not remove the loss, but it can turn part of it into a timing effect rather than a permanent one.
Risk management
Insurance is part of that resilience equation, too. Cover is never uniform across the market, because it reflects each operator’s risk appetite. Some businesses are well protected, while others have chosen to retain more risk. In these situations, more proactive risk management actions may be preferred, such as moving inventory, reducing throughput and process operating severity [intensity] to add resiliency to energy infrastructure in case of damage.
Prior investment in resilience is also showing its value more broadly. That includes pipeline networks, flexible logistics, broader product portfolios, experienced operating teams and, in some cases, stronger risk transfer strategies. The businesses under the most pressure are those still heavily reliant on moving bulk liquids through constrained maritime channels and with fewer options when disruption hits. Those with more routes, products and risk flexibility are coping better.
None of this should be mistaken for complacency. Recovery will take time. Even when conditions improve, shipping patterns will not normalise overnight. The losses are real, and the fallout will be global. But this is no longer only a damage story. It is a test of operational resilience, and so far the region is showing it has more of that than many assume.
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Adnoc Gas to rally UAE downstream project spending
7 April 2026
Despite the impact of recent Iranian attacks on its assets, the gas processing business of Abu Dhabi National Oil Company (Adnoc Gas) is on course to emerge as the largest spending entity in the UAE’s downstream oil and gas sector this year.
Adnoc Group created Adnoc Gas, which began operating as a commercial entity in 2023, through the merger of its former subsidiaries Adnoc Gas Processing and Adnoc LNG. The consolidation of Adnoc’s gas processing and liquefied natural gas (LNG) operations formed one of the world’s largest gas processing entities, with a capacity of about 10 billion standard cubic feet a day (cf/d) across eight onshore and offshore sites, including Asab, Bab, Bu Hasa, Habshan and Ruwais.
The scale of its infrastructure – particularly its 3,250-kilometre pipeline network, which is being expanded under the $3bn Estidama project – positions Adnoc Gas as a critical enabler of both domestic industrial growth and export competitiveness.
Resilience amid geopolitical risk
The recent drone-related disruptions highlight the growing exposure of Gulf energy infrastructure to regional conflict. However, the limited operational impact reported by Adnoc Gas suggests a high degree of system redundancy and resilience, supported by networked infrastructure and diversified processing capacity.
This resilience is crucial as the company pushes ahead with its $20bn-$28bn capital programme for 2023-29. Continued investment despite security risks signals confidence in both project economics and the UAE’s ability to safeguard critical assets.
Rich Gas Development
At the core of Adnoc Gas’ expansion strategy is the Rich Gas Development (RGD) programme, which aims to increase processing capacity by 30% by 2030.
The RGD project will enable the development of new gas reservoirs, helping to boost gas liquids exports, support UAE gas self-sufficiency and provide feedstock to the country’s growing petrochemicals sector, Adnoc Gas says.
The first phase of the RGD project is under construction. Adnoc Gas awarded $5bn-worth of engineering, procurement and construction management (EPCm) contracts in three tranches for phase one last June – its largest-ever capital investment.
The contracts cover the expansion of key gas processing plants to increase throughput and improve operational efficiency across four facilities: Asab, Bu Hasa, Habshan (onshore) and the Das Island liquefaction facility (offshore).
The first tranche, valued at $2.8bn, was awarded to UK-headquartered Wood for the Habshan facility. The company said the contract value includes pass-through revenue and that it expects to recognise about $400m in EPCm revenue.
Wood’s scope includes upgrades and debottlenecking of the Habshan and Habshan 5 gas processing complexes and pipelines, including brownfield modifications and the installation of new facilities.
The remaining two tranches – $1.2bn for the Das Island liquefaction facility and $1.1bn for the Asab and Bu Hasa facilities – were awarded to UAE-based Petrofac and Dubai-based Kent, respectively.
Petrofac, separately, said it will provide EPCm services and oversee procurement and construction contracts for a new inlet facility; two gas dehydration and compression trains, each with a capacity of 420 million cf/d; and associated infrastructure at Das Island. The company will also upgrade existing facilities to increase capacity for collecting and transporting raw gas.
RGD growth phases
Adnoc Gas’ capital expenditure commitment of $20bn for the 2023-29 period is expected to rise to about $28bn as it targets final investment decisions (FIDs) on the second and third phases of the RGD programme in the first quarter of 2026.
These phases involve building a natural gas liquids (NGL) fractionation train at the Ruwais facility and a new gas processing train at Habshan. Adnoc Gas has selected main contractors for EPC works on both projects, although official contract awards are pending.
Italy’s Tecnimont has been selected for the Ruwais NGL Train 5 project, which will have a capacity of 22,000 tonnes a day, or about 8 million tonnes a year.
China-based Wison Engineering has been selected for the Habshan 7 gas processing train. The Habshan complex is one of the largest in the UAE and the wider Middle East and North Africa region, with a capacity of 6.1 billion cf/d across five trains and 14 processing units.
With Adnoc Group advancing its P5 programme to raise oil production capacity to 5 million barrels a day by 2027, higher volumes of associated gas are set to enter the grid. The new train at Habshan, scheduled for commissioning in 2029, will help process these additional volumes.
Bab Gas Cap development
As part of its upstream expansion plans, Adnoc Group is working to extract gas from four underdeveloped gas cap reservoirs at the Bab onshore field: Thammama A, B, F and H. The Thammama A, B and H reservoirs are expected to produce a combined 1.45 billion cf/d, while Thammama F is projected to produce 396 million cf/d.
Existing processing capacity at Habshan will be insufficient to handle these volumes. As a result, Adnoc Gas plans to build new facilities to process up to 1.85 billion cf/d of additional gas.
The company is planning a new gas processing plant in the Bab area, about 170 kilometres from Abu Dhabi, along with associated pipelines and supporting infrastructure, as part of the broader Bab gas cap development project.
Adnoc Gas has divided the EPC scope into four packages. It completed contractor prequalification in February and is expected to issue main EPC tenders in the second quarter.
The company’s capital expenditure commitment could exceed $30bn once it reaches FID on the Bab gas cap development, which is expected later this year.
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Israel ramps up gas exports to Egypt
7 April 2026
Israel’s gas flows to Egypt have returned to pre-war levels after restarting on 4 April, helping to ease the ongoing gas shortage in the North African country.
Around 1.1 billion cubic feet a day is being transported by pipeline from Israel’s Leviathan and Tamar gas fields, according to a Bloomberg report.
This is the same level that was being transported prior to Israel shutting down production from its offshore gas fields due to security concerns, and halting flows to Egypt on 28 February.
Despite having its own gas reserves, Egypt is a net importer of natural gas and has been impacted by the surge in global prices since the US and Israel started their war with Iran.
Last month, Egypt increased the prices of several petroleum products and natural gas for vehicles due to higher global energy prices.
On 9 March, Egypt raised the price of natural gas for vehicles by 30% to E£13 ($0.25) a cubic metre.
Egypt’s Petroleum & Mineral Resources Ministry said the increase was introduced due to “exceptional circumstances” resulting from geopolitical developments in the Middle East and their direct impact on global energy markets.
It said that the regional conflict had led to a significant increase in import and domestic production costs.
Egypt, the Middle East and North Africa region’s biggest liquefied natural gas (LNG) importer, is facing uncertainty over its LNG supplies in the coming months.
Between March 2025 and February 2026, Egypt imported 9,440 kilotonnes of LNG, with the majority purchased under short-term agreements, mainly with third parties such as trading houses.
Last year, it was reported that Egypt had signed deals for around 150 cargoes through to the summer of 2026.
READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDFEconomic 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:
> AGENDA: Gulf economies under fire> GCC CONTRACTOR RANKING: Construction guard undergoes a shift> MARKET FOCUS: Risk accelerates Saudi spending shift> QATAR LNG: Qatar’s new $8bn investment heats up global LNG race> LEADERSHIP: Shaping the future of passenger rail in the Middle EastTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16280784/main.jpg -
Egypt gas sector activity surges amid regional conflict
7 April 2026
There is a surge of activity in Egypt’s gas sector as investors pour money into boosting domestic production and the country makes deals to leverage its existing liquefied natural gas (LNG) export infrastructure.
The increase in activity has come as the disruption to shipping through the Strait of Hormuz continues to prevent the shipment of around 20% of the world’s LNG supplies to consumer nations.
While Egypt remains a net importer of natural gas, its geographical position, significant gas reserves and existing infrastructure, including two LNG export terminals, mean it can potentially capitalise on the current supply crunch.
Harmattan development
On 6 April, Arcius announced the final investment decision (FID) to develop the Harmattan gas field offshore Egypt.
Arcius is a joint venture between UK-based BP and the UAE’s Adnoc, focused on developing gas assets in Egypt and the wider Eastern Mediterranean.
The company acquired the El-Burg offshore concession area, which includes the Harmattan field, in February.
An engineering, procurement, installation and commissioning (EPIC) contract for the project has been awarded to Egypt’s Enppi, while Cairo-based Petrojet and Petroleum Marine Services (PMS) have been awarded work as subcontractors.
In a statement, Naser Al-Yafei, the chief executive of Arcius, said: “The FID to develop the Harmattan field marks an important milestone in advancing one of our first projects in Egypt toward production.”
Idku LNG
UK-based Shell also held a meeting with Egypt’s Petroleum Minister Karim Badawi recently, with talks focusing on increasing domestic natural gas production and utilising the Idku LNG export terminal.
The terminal has a nameplate capacity of 7.2 million tonnes a year, but is not currently operated at full capacity.
The Idku facility is owned by a consortium of companies, with Shell and Malaysia’s Petronas holding the biggest stakes.
Gas corridor
On 30 March, Egypt signed a natural gas cooperation agreement with Cyprus, laying the groundwork for a regional gas corridor that will allow Nicosia to transport its gas to Egypt to use its export infrastructure.
The signing ceremony took place on the sidelines of a conference in Cairo, where both parties agreed to cooperate on the development and exploitation of gas resources.
The text of the agreement focused on technical and commercial aspects of the deal, establishing a basis for future negotiations.
Under the agreed terms, Cyprus’ gas will be processed in Egypt’s liquefaction facilities before being shipped to export markets.
The agreement built on a memorandum of understanding (MoU) signed in February last year, in which Egypt agreed to buy gas from Cyprus’ Aphrodite field.
Block 6
It is also expected that Italy’s Eni, which operates Cyprus’ Block 6 concession with France’s TotalEnergies, will announce FID for the development of the Kronos field in the coming weeks.
The field has reserves of 3.1 trillion cubic feet and, under current plans, the field’s gas will be transported to Egypt via pipeline before being exported from Egypt’s Damietta LNG terminal.
Future investment
As a net importer of natural gas, Egypt faces short-term economic problems due to the current high-price environment, forcing the country to pay more for energy imports.
While this is a major setback for the country and is likely to erode its foreign currency reserves over the coming months, the current global shortage of natural gas could lead to increased investment in the country’s oil and gas sector.
This could accelerate existing project plans within the sector as well as the development of new projects.
READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDFEconomic 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:
> AGENDA: Gulf economies under fire> GCC CONTRACTOR RANKING: Construction guard undergoes a shift> MARKET FOCUS: Risk accelerates Saudi spending shift> QATAR LNG: Qatar’s new $8bn investment heats up global LNG race> LEADERSHIP: Shaping the future of passenger rail in the Middle EastTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16280782/main.jpg -
Adnoc Gas and Borouge facilities suffer Iranian attacks
6 April 2026
Debris from Iranian drones intercepted by the UAE’s air defence systems has caused damage at the Habshan gas processing facility operated by Adnoc Gas in Abu Dhabi, killing one person on site, as well as at the petrochemicals complex operated by Borouge.
In a disclosure to the Abu Dhabi Securities Exchange (ADX) on 5 April, Adnoc Gas, a subsidiary of Abu Dhabi National Oil Company (Adnoc Group), said debris resulting from a successful interception by UAE air defences in the area caused damage to a limited number of facilities within the Habshan gas complex on 3 April.
The incident resulted in the death of an engineer working at the facility for Egyptian contractor Petrojet during evacuation. Four other contractors sustained minor injuries and were discharged from hospital after receiving treatment.
Specialised teams were immediately dispatched to isolate the affected area and begin a comprehensive assessment of the damage to the production line, which is ongoing, Adnoc Gas said.
“We are profoundly saddened by the loss of life and extend our deepest condolences to the family and loved ones of the deceased. Our thoughts are also with the injured colleagues, and we wish them a full and speedy recovery. The safety, security and wellbeing of our people remains our highest priority,” Fatema Al-Nuaimi, CEO of Adnoc Gas, said in the filing.
“We remain committed to delivering shareholder value. Our balance-sheet strength and capital discipline support the resilience of the company,” she added.
Adnoc Gas further said it is meeting domestic demand in the UAE through other facilities, with no impact on customer supply. “The company continues to actively collaborate with international customers and partners where needed,” it said in its disclosure.
The Habshan gas processing facility has been attacked at least twice in March during Iran’s ongoing war with Israel and the US.
Borouge incident
Authorities in Abu Dhabi reported fire damage at Borouge’s main petrochemical facility caused by fragments from a drone interception falling on the complex on 5 April. No injuries were reported, the Abu Dhabi Media Office said.
“Production activity in affected areas has been suspended following the incident whilst damage assessment and repairs are carried out,” the company said in a filing with ADX on 6 April.
The company also highlighted market conditions. “A global shortage of polyolefins is driving a strong recovery in prices in March, which has continued in April,” it said.
Borouge said it remains financially positioned to manage near-term impact. “Borouge retains significant financial resilience to navigate short-term operational disruption due to its strong cash generation and significant available liquidity.”
Borouge pointed to strong operating performance heading into the disruption. “In the first quarter of 2026, Borouge achieved high utilisation rates and was able to sell a significant proportion of its production during the month of March via alternative routes,” the statement said.
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