Monthly briefing: 14 key developments in the region

21 November 2022

By MEED staff

Lukewarm Cop27 ends

UAE and US sign $100bn energy programme

BlackRock looks to invest in projects with PIF

Riyadh signs construction deals during Seoul visit

Middle East outpaces global economic growth

Riyadh Grade A office occupancy hits 98 per cent

Dubai developer plans world's tallest residential building

Saudi Arabia launches national automaker

Alba reaches Block 4 financial close

Partners award contracts for $8.5bn US chemicals project

Investors launch Sohar industrial projects

Aramco and IBM plan Riyadh innovation hub


Egypt climate conference ends with agreement on payout

Negotiators from nearly 200 countries at the 2022 UN climate summit Cop27, which took place in Egypt on 6-18 November, have agreed to set up a loss and damage fund aimed at helping vulnerable countries to cope with climate disasters. They also agreed that global greenhouse gas emissions need to be cut nearly in half by 2030. 

The agreement also reaffirmed the goal of keeping global warming to 1.5 degrees Celsius above pre-industrial levels. However, a deal to phase out the use of fossil fuels, and not just coal, could not be agreed upon after a number of nations, including China and Saudi Arabia, blocked the proposal. Read more

The Middle East was thrust firmly onto the global stage on 20 November when football’s 2022 World Cup kicked off in Qatar  

Region pitches to be global sporting hub


Opec and non-Opec partners cut 2 million b/d of production

Saudi Arabia, the world’s largest crude oil exporter, has started to cut its exports as Opec+ begins to reduce its overall target production by 2 million barrels a day (b/d).  

Saudi Arabia had cut its crude oil exports by more than 400,000 b/d by the third week of November, while exports from Opec could be on course to drop by 1 million b/d.  

In October, Opec+ announced it would slash its collective target by 2 million b/d from November. Although the actual reduction is expected to be about 1.1 million b/d, it is still the biggest cut since the record reduction announced in April 2020, when oil demand plunged at the start of the pandemic. 


UAE and US sign $100bn clean energy partnership

The UAE and the US have signed a partnership that aims to catalyse $100bn in financing and other support, in addition to deploying 100GW of clean energy in the US, UAE and emerging economies around the world by 2035. They also reaffirmed their commitment to climate action, in line with their 2050 net-zero goals. 

The two countries plan to stimulate private and public sector support in four areas: clean energy innovation, financing, deployment and supply chains; carbon and methane management; advanced reactors; and industrial and transport decarbonisation. Read more


PIF and BlackRock agree to explore infrastructure projects 

Saudi Arabia’s Public Investment Fund (PIF) has signed a non-binding memorandum of understanding with US asset manager BlackRock to jointly explore infrastructure projects in the Middle East, with a majority of the investment activity focused on Saudi Arabia.

The target projects are in several sectors, including energy, power, utilities, water, environment, transportation, telecommunications and social infrastructure. 

BlackRock will look to build a dedicated infrastructure investment team in Riyadh to cover the Middle East region.

In a statement, the PIF said that the aim is to leverage positive Saudi and regional market dynamics to deliver sustainable long-term returns.

The sovereign wealth fund added that the two entities plan to work together to attract regional and international investors to participate in investment projects, and boost foreign direct investment into Saudi Arabia. 

This will add value to the Saudi economy and the wider market while facilitating knowledge and skills transfer. Read more


IMF predicts economic growth for the Middle East in 2022

The real GDP of oil exporting countries in the Middle East is projected to grow at 5.2 per cent in 2022, up from 4.5 per cent in 2021, according to the Washington-based IMF. 

Growth is projected to slow to 3.5 per cent in 2023 as Opec+ production wanes, oil prices ease and global demand slows. 

Crude producers are projected to accrue a cumulative oil windfall of about $1tn in 2022−26, which the IMF said oil-exporting countries like Saudi Arabia and the UAE could use to continue to invest in projects that support future economic growth. Read more


Deals worth $30bn signed during royal visit to Seoul

Agreements totalling an estimated $30bn were signed during Saudi Crown Prince Mohammed bin Salman al-Saud’s visit to Seoul, South Korea on 17 November. 

The biggest deal was a commitment from Saudi Aramco to invest $7bn in building an integrated refinery and petrochemicals complex in South Korea through its local affiliate S-Oil.

The new plant will have capacity to produce 3.2 million tonnes a year of petrochemicals.

Five South Korean companies – Korea Electric Power Corporation (Kepco), Korea Southern Power Company, Korea National Oil Corporation, Posco Holdings and Samsung C&T Corporation – have also signed agreements with Saudi Arabia’s Public Investment Fund to build and operate a green hydrogen and green ammonia production facility in Saudi Arabia. Read more


Riyadh Grade A office occupancy hits 98 per cent

Occupancy levels for prime office space in Riyadh have risen by four percentage points to 98 per cent according to a report by property consultancy Knight Frank. 

Average lease rates for prime office space have increased by 18 per cent over the past 12 months to about SR1,775 ($473) a square foot. The company said there is unprecedented demand for Grade A office space. 

“As the kingdom’s economic transformation plan unfolds, business activity is rising at an extraordinary pace. Seventy firms have now committed to relocating their regional headquarters to Riyadh, including Aldeham Education Group and French rolling stock manufacturer Alstom,” Knight Frank said. Read more


Dubai developer plans world’s tallest residential building

Local real estate developer Binghatti and jewellery brand Jacob & Co have announced plans to build the world’s tallest residential structure in Dubai’s Business Bay district.

Known as Burj Binghatti Jacob & Co Residences, the tower will comprise more than 100 storeys and will offer two- and three-bedroom apartments. Amenities in the building will include an infinity pool, a spa and a gymnasium.

Companies recently moved onsite in Business Bay to work on a 116-storey tower for Binghatti. The contractor is Granada Europe Construction. The consultant is Silver Stone Engineering Consultants. Read more


Saudi Arabia launches electric vehicle manufacturer

Saudi Arabia’s Crown Prince Mohammad bin Salman al-Saud has announced the launch of Ceer, the first Saudi electric vehicle brand. Ceer is the first Saudi automotive brand to produce electric vehicles in Saudi Arabia.

The company is a joint venture of Saudi sovereign wealth entity the Public Investment Fund and Taiwan-based Hon Hai Precision Industry Company, which trades as Foxconn internationally.

Foxconn will license component technology from BMW for use in the vehicle development process, with the first vehicles – sedans and sports utility vehicles – expected to be available in 2025.

Foxconn will develop the electrical architecture of the vehicles, which will feature infotainment, connectivity and autonomous driving technologies.

Ceer is expected to attract over $150m in foreign direct investment and create up to 30,000 direct and indirect jobs. Read more

Further reading

Alba agrees Block 4 financing

Aluminium Bahrain (Alba) has reached financial close on the 681MW combined-cycle gas turbine plant that comprises Block 4 of the smelter’s Power Station 5. China Export & Credit Insurance Corporation (Sinosure) will provide a $225m facility.

Contracts awarded for US plant

QatarEnergy and Chevron Phillips Chemical Company have reached final investment decision on the Golden Triangle Polymers Plant, an $8.5bn integrated polymers facility in the US. The plant will include the biggest ethylene cracker in the world with a capacity of 2.1 million tonnes a year.

Investors launch Sohar projects

Investors have launched two non-oil industrial projects in Sohar Freezone in Oman. The sultanate’s first petroleum coke calcining facility will be built at a total investment of about $155.9m, while a titanium dioxide production facility will be established at a cost of $112m.

Aramco plans innovation hub

Saudi Aramco and US technology company IBM plan to establish an innovation hub in Riyadh. The hub will support tech-driven economic growth in Saudi Arabia with the help of emerging technologies in hybrid cloud, artificial intelligence and quantum computing.
MEED Editorial
Related Articles
  • Dubai South completes autonomous vehicle trials

    17 July 2024

    Dubai South, an urban master development focused on aviation, logistics and real estate, has completed the first stage of an autonomous vehicle trial in partnership with Russian transport solutions company Evocargo.

    The trials were carried out on a set route in a closed area of the Dubai South Logistics District, Dubai South said on 17 July.

    During the trials, Evocargo checked and validated the hardware, software and reliability of its unmanned electric truck – the Evocargo N1 – for future service in the Logistics District.

    According to Dubai South, autonomous navigation on a predefined route was tested, with an emphasis on safety in mixed traffic scenarios involving interaction with other participants including automobiles, trucks and pedestrians.

    The tests measured Evocargo N1’s performance in object detection, accident prevention, collision avoidance with moving obstacles and emergency stops.

    The truck’s autopilot system was tested in manoeuvres including parking, reverse parking, turning and reverse turning.

    The test also validated the control centre's functionality in route management, remote monitoring and control.

    Dubai South said that no failures or potentially hazardous incidents were reported by any parties during the series of tests.

    Evocargo prepared a report on the trial results across two stages, including the Evocargo N1 platform carrying out freight transportation tasks on a standard route in a closed area.

    Dubai South said: “The platform’s ability to respond to its surrounding environment in mixed traffic was extensively tested and met high validation standards.”

    Dubai South and Evocargo agreed to carry out the UAE’s first autonomous electric vehicle trials in a memorandum of understanding signed in December 2022.

    The initiative contributes to Dubai’s long-term goal that 25% of total transportation in the emirate will be autonomous by 2030.

    Related read: UAE among world’s most prepared for autonomous vehicles
    Jennifer Aguinaldo
  • PIF signs renewables joint ventures

    17 July 2024

    Register for MEED's 14-day trial access 

    Saudi Arabia's sovereign wealth vehicle, the Public Investment Fund (PIF), has announced the signing of three new agreements to localise the manufacturing and assembly of equipment and components needed for solar and wind power projects.

    Renewable Energy Localisation Company (RELC) – a fully owned PIF company – entered into the three agreements, in line with the Saudi Energy Ministry’s drive to localise the production of renewable energy components, the PIF said in a statement on 16 July.

    RELC focuses on "creating partnerships between leading global manufacturers and the Saudi private sector to meet growing local and export demand for renewable energy, and secure and strengthen local supply chains".

    The first joint venture (JV) comprises China-headquartered wind power technology company Envision Energy and Saudi firm Vision Industries. The new company plans to manufacture and assemble wind turbine components including blades with an estimated annual generation capacity of 4GW. Under this agreement, RELC will hold 40% of the JV, with Envision holding 50% and Vision Industries holding 10%.

    The second JV features China-based solar photovoltaic (PV) supplier Jinko Solar and Vision Industries. The JV entails localising the manufacture of PV cells and modules for high-efficiency solar generation. Under the agreement, which projects annual production of 10GW in generation capacity, RELC will hold 40% of the JV, with Jinko Solar holding 40% and Vision Industries holding 20%.

    The final JV was formed by Lumetech, a subsidiary of China's TCL Zhonghuan Renewable Energy, and Vision Industries. This deal will localise the production of solar PV ingots and wafers with annual production sufficient to generate 20GW of power. Under this agreement, RELC will hold 40% of the JV, with Lumetech holding 40% and Vision Industries having 20%.

    The PIF said: "These agreements will enable the localisation of advanced power generation and manufacturing technologies for renewable energy production in Saudi Arabia, as well as maximising local content to help meet growing domestic, regional and international demand."

    It expects the agreements to "enhance the ability of local manufacturing to benefit from the global energy transition and will support the PIF’s efforts to consolidate Saudi Arabia’s position as a global centre for exporting products and services for the renewables sector". 

    Yazeed Al-Humied, deputy governor and head of Middle East and North Africa investments at the PIF, said the new agreements will contribute to localising the production of 75% of the components in Saudi Arabia’s renewable projects by 2030, in line with the Energy Ministry’s National Renewable Energy Programme.

    He added that these projects will also enable Saudi Arabia to become a global hub for the export of renewable technologies.

    Overall, the PIF, through Riyadh-headquartered utility developer Acwa Power and Badeel, is developing a total of eight renewable energy projects with a total capacity of 13.6GW, involving more than $9bn in investments from the PIF and its partners. These joint projects include Sudair, Shuaibah 2, Ar Rass 2, Al-Kahfah, Saad 2, Haden, Muwayh and Al-Khushaybi.

    Related read: Developers regroup for Saudi renewables plans
    Jennifer Aguinaldo
  • Dubai sets October deadline for Metro Blue Line bids

    17 July 2024


    Register for MEED's 14-day trial access 

    Dubai’s Roads & Transport Authority (RTA) has extended the deadline for consortiums to submit their bids for the contract to design and build Dubai Metro’s new Blue Line to 7 October.

    The previous deadline was 19 July.

    The RTA informed companies on 12 January that they had been prequalified to bid for the contract. The tender documents were issued on 15 January.

    In June, MEED reported that several of the consortiums planning to bid for the contract to deliver Dubai Metro's Blue Line had changed as some civil contractors and rolling stock providers had decided not to participate in the tender.

    According to sources close to the project, the consortiums planning to bid for the project include:

    • Hitachi / Larsen & Toubro / Powerchina / Wade Adams (South Korea / India / China / UAE)
    • China Railway Rolling Stock Corporation / Limak Holding / Mapa Group (China / Turkiye / Turkiye)
    • Alstom / FCC / China State Construction Engineering Corporation (France / Spain / China)
    • CAF / China Tiesiju Civil Engineering Group / Arab Contractors / Binladin Contracting Group (Spain / China / Egypt / UAE)

    In November, MEED exclusively reported that contractors were forming consortiums to bid for the contract to design and build the metro line.

    The RTA issued a notice seeking expressions of interest from contractors for the design and build of the line in October 2023.

    The project is expected to cost several billion dollars to develop. It is one of Dubai’s largest upcoming infrastructure schemes, requiring international contractors to work in joint ventures with local partners. 

    The design-and-build contractor will be responsible for all civil works, electromechanical works, rolling stock and rail systems. After completing the project, the contractor will assist in maintenance and operations for an initial three-year period.

    The Blue Line will connect the existing Red and Green lines. It will have a total length of 30 kilometres (km), 15.5km underground and 14.5km above ground.

    The line will have 14 stations, seven of which will be elevated. There will be five underground stations, including one interchange station, and two elevated transfer stations connected to the existing Centrepoint and Creek stations.

    The scope of the contract also includes the supply of 28 driverless trains, the construction of a depot to accommodate up to 60 trains, and the construction of all associated roads, facilities and utility diversion works.

    The detailed scope of work for the project includes:

    • Civil works, including detailed design and construction of architectural and structural components (including viaducts, tunnels and stations)
    • Design and execution of electromechanical works
    • Design, procurement and delivery of operation and control systems for rail, stations and facilities
    • Design, manufacturing and supply of rolling stock.
    Yasir Iqbal
  • Firms express interest in QatarEnergy NGL train project

    17 July 2024

    Register for MEED's 14-day trial access 

    Contractors have expressed interest in a QatarEnergy project to add a fifth natural gas liquids (NGL) train at its NGL complex in Qatar’s Mesaieed Industrial City.

    The objective of the project is to build a fifth NGL train (NGL-5) with the capacity to process up to 350 million cubic feet a day of rich associated gas from QatarEnergy’s offshore and onshore oil fields.

    QatarEnergy issued the expression of interest (EoI) document for the NGL-5 project in June, with contractors submitting responses by 24 June, sources told MEED.

    According to sources, the following contractors are understood to have expressed interest in participating in the project’s main contract tendering process:

    • CTCI Corporation (Taiwan)
    • Larsen and Toubro Energy Hydrocarbon (India)
    • McDermott (US)
    • Saipem (Italy)
    • Samsung E&A (South Korea)
    • Tecnicas Reunidas (Spain)
    • Tecnimont (Italy)

    ⁠Following the end of the prequalification round, QatarEnergy is expected to issue the main engineering, procurement and construction (EPC) contract for the NGL-5 project in the third quarter of this year.

    In the EoI document, QatarEnergy said that it began site preparation for the project in the fourth quarter of last year and expects work to complete in the first quarter of 2025.

    QatarEnergy intends to start operations at the NGL-5 facility by the second quarter of 2028.

    Project scope of work

    Associated gas from the PS1, PS2 and PS3 offshore fields and the Dukhan onshore field gets processed at existing facilities in the NGL complex at Mesaieed – the FSP, NGL-1 and Qapco ERU units.

    The planned NGL-5 facility will replace the three units at the Mesaieed complex and process gas from the PS1, PS2 and Dukhan fields.

    The scope of work on the project involves EPC of units for the following functions:

    • Feed gas compression
    • Slug handling
    • Gas sweetening
    • Dehydration
    • Mercury removal
    • NGL fractionation
    • NGL recovery
    • Product treatment
    • Propane refrigeration
    • Acid gas enrichment
    • Sulphur recovery
    • Anti-flaring
    • Utilities
    • Boil-off gas recovery
    • Drains and collection networks
    • Effluent water treatment plant
    • Carbon dioxide treatment and sequestration/export
    • Brownfield modifications
    • Product rundown pipelines.

    QatarEnergy plans to divide the scope of work on the NGL-5 project into five EPC packages.
    Indrajit Sen
  • SWPC moves Jubail-Buraydah bid deadline

    16 July 2024


    Saudi Water Partnership Company (SWPC) has extended by three weeks the tender closing date for a contract to develop and operate Saudi Arabia’s second independent water transmission pipeline (IWTP) project, which links Jubail and Buraydah.

    The planned Jubail-Buraydah IWTP is a 603-kilometre (km) pipeline that can transmit 650,000 cubic metres a day of water.

    SWPC has moved the deadline by which companies can submit their proposals for the contract from mid-July to 8 August, according to a source close to the project.

    At least three teams are expected to submit proposals for the contract, MEED previously reported. They are: 

    • Alkhorayef Water & Power Technologies (local) / Acciona (Spain) / Cobra Instalaciones (Spain) 
    • Nesma Company (local) / Aljomaif Energy & Water (Jenwa, local) / Buhur Investment (local)
    • Vision Invest (local) / Abu Dhabi National Energy Company (Taqa, UAE)

    The Jubail-Buraydah IWTP project is larger than the kingdom's first IWTP linking Rayis and Rabigh, which a consortium including the local Alkhorayef Water & Power Technologies Company and Spain's Cobra Instalaciones y Servicios will develop and operate at a cost of SR7.78bn ($2bn).

    SWPC issued the request for proposals for the Jubail-Buraydah IWTP scheme to the prequalified bidders in October last year.

    The state water offtaker qualified 22 companies to bid for the contract in April 2022. 

    The transaction advisory team for the client comprises the US/India’s Synergy Consulting as financial adviser and the local Amer Al-Amr and Germany’s Fichtner Consulting as legal and technical advisers, respectively.

    SWPC’s obligations under the water transfer agreement will be guaranteed by a credit support agreement entered into by the finance ministry on behalf of the Saudi government.

    The project is part of the kingdom’s National Water Strategy 2030, which aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90% of national urban supply, to reduce reliance on non-renewable ground sources.

    SWPC’s Seven-Year Planning Statement calls for developing eight IWTP projects by 2028.
    Jennifer Aguinaldo