Monthly briefing: 22 key developments in the region

28 September 2022

By Indrajit Sen

Opec+ agrees minor production increase

King appoints crown prince as Saudi prime minister

Lebanon parliament approves $1.2bn draft budget

Iraq court rules against national oil company

Libya oil production continues to grow

President approves Egypt's Olympic plans

> Dubai prepares hydrogen strategy

GCC central banks raise interest rates

UK and GCC hold ministerial meeting at the UN


Oil producers will raise output by 100,000b/d in October

The Opec+ alliance of oil producers decided in September that it would increase oil production by just 100,000 barrels a day (b/d) in October to support crude prices, which have fluctuated in recent weeks amid fears that a global economic recession will curb demand for oil. 

Opec+ members also increased overall oil production by 100,000b/d in September. 

The alliance agreed to increase its July and August crude production by about 50 per cent to 648,000b/d, fully restoring the 5.8 million b/d output that the group had cut at the peak of the Covid-19 pandemic. Read more


Deadly protests follow woman’s death in custody

Thirty-five people have been killed in protests in Iran following the death of Mahsa Amini in police custody on 16 September.

Protests have been reported in 31 provinces.

The 22-year-old Amini had been detained for breaking headscarf rules and was reportedly beaten with batons.

Officials said she suffered heart failure and Interior Minister Ahmad Vahidi has stated that she was not beaten. 

President Ebrahim Raisi pledged to crack down on the unrest on 24 September.

The official Islamic Republic News Agency reported on 25 September that there had been large-scale demonstrations to condemn the protests.

21 September: Iranian demonstrators take to the streets of Tehran during a protest for Mahsa Amini, days after she died in police custody. Credit: AFP via Getty Images


Dubai toll operator raises over $1bn from oversubscribed stock listing

Dubai toll operator Salik raised $1.017bn from its initial public offering (IPO) on the Dubai Financial Market, as part of a series of IPOs of state enterprises aimed at boosting the size of the emirate's capital market.

The IPO was more than 49 times oversubscribed across all tranches, with total gross demand at $50.2bn.

The company had set its offering price at AED2 ($0.54) a share, giving it a valuation of more than $4bn.

The emirate's government sold more than 1.867 billion shares in the company, or 24.9 per cent, up from the previously announced 1.5 billion shares, equivalent to 20 per cent.


Saudi Arabia, Arab League and EU hold meeting in New York

Saudi Foreign Affairs Minister Prince Faisal bin Farhan al-Saud and Arab League secretary-general Ahmed Aboul Gheit attended a meeting of the Arab Peace Initiative Committee and its sponsors in the EU. The meeting took place at the UN General Assembly in New York. 

The Arab Peace Initiative, which Saudi Arabia launched in 2002, is a proposal to end the Arab-Israeli conflict. The members of the Arab Peace Initiative Committee are Jordan, Egypt, Bahrain, Tunisia, Algeria, Saudi Arabia, Sudan, Iraq, Palestine, Qatar, Lebanon, Morocco and Yemen. The initiative is sponsored by Spain, Sweden and France.


Two years of high oil prices set to improve regional outlook

Rating agency Moody’s Investors Service has said that elevated oil prices during the next two years will lead to a significant improvement in the fiscal and external positions of GCC sovereigns, partly reversing the sharp deterioration in their balance sheets since 2015. 

Improvements in creditworthiness will hinge on the extent to which regional governments utilise the windfall to address constraints posed by their exposure to cyclical oil price and demand volatility, and by longer-term carbon transition risks, Moody’s said.

The agency expects oil prices to average about $105 a barrel in 2022 and $95 a barrel in 2023. As a result, most hydrocarbon-exporting countries in the GCC will run fiscal and current account surpluses, allowing governments to pay down debts, rebuild fiscal reserves and accumulate foreign-currency buffers.


Regional banks are returning to pre-pandemic form

After a strong first half, ratings agency S&P Global expects that earnings for most GCC banks will almost reach pre-pandemic levels by the end of this year amid high oil prices and rising interest rates.

In the second half of 2022, S&P forecasts further strengthening of regional banks’ interest margins and a manageable rise in cost of risk amid lingering effects from the Covid-19 pandemic via loans that benefited from support measures and were then restructured. Combined, these factors will be a net positive for banks’ earnings.


Saudi infrastructure and property projects top $1.1tn

The aggregate value of property and infrastructure projects since the launch of Saudi Arabia’s National Transformation Plan in 2016 has crossed $1.1tn as the kingdom continues to diversify its economy, according to real estate consultancy Knight Frank. 

The $500bn Neom city development is the biggest of 15 major projects in Saudi Arabia that are currently at various phases of construction. The kingdom plans to have more than 555,000 residential units, 275,000 hotel rooms, 4.3 million square metres (sq m) of retail and 6.1 million sq m of new office space by 2030. 

The country is also developing several large-scale tourism projects as it seeks to increase the economic contribution of the sector from 3 per cent of GDP to 10 per cent by the end of this decade.


UK prime minister considers relocating British embassy

UK Prime Minister Liz Truss is considering moving the British embassy in Tel Aviv to Jerusalem. 

Truss spoke about a possible move to the contested city during a meeting with Israeli Prime Minister Yair Lapid on the sidelines of the UN General Assembly in New York in September. 

Despite Israel having designated Jerusalem as its capital, Britain has long maintained its embassy in Tel Aviv. 

When he was president of the US, Donald Trump took the controversial decision to relocate the American embassy to Jerusalem in May 2018. 

Both Israelis and Palestinians claim the city as their capital.


First Saudi woman to be sent to space in a crewed mission

Saudi Arabia plans to send a woman into space for the first time as part of its new mission programme. 

A crew will be launched next year that will include the first Saudi female pilot and astronaut. 

The kingdom’s astronaut programme aims to produce qualified Saudi citizens who will take part in short- and long-term space flights, as well as participate in scientific experiments, international research and future space-related missions. 

The new programme comes under the umbrella of Saudi Vision 2030 and will fall under the National Space Strategy, the details of which will be announced in the coming months.


Qatar to shut borders to non-World Cup ticket holders

Entry to Qatar will be restricted from 1 November to citizens, residents and holders of the World Cup Hayya card, the tournament’s organising committee has announced. 

The suspension of visits by people not attending Fifa World Cup matches will continue until 23 December, five days after the final match takes place in Doha. 

The restrictions apply to all air, land and sea borders into Qatar. 

Football fans in possession of a match ticket for the World Cup must also apply for a Hayya entry permit – a pre-approved digital visa linked to a passport that offers free public transport around the country. 

The Hayya card allows entry into Qatar until 23 January 2023. 

Qatari citizens and residents, GCC citizens holding a Qatari identification card, holders of work entry permits and personal visas, and approved humanitarian cases will be exempt from the restrictions.
MEED Editorial
Related Articles
  • Oman 500MW solar project secures financing

    8 December 2023

    Oman's Manah 1 solar photovoltaic (PV) independent power producer (IPP) project has signed financing deals worth $302m with France's Societe Generale, the Export-Import Bank of Korea (Korea Eximbank) and Bank Muscat.

    The Manah 1 IPP developers and investors, comprising Korea Western Power Company (Kowepo) and France's EDF Renewables, signed the deal on 6 December.

    According to a local media report citing a Kowepo statement, the Korea Eximbank plans to provide $170m in project financing.  

    A team comprising EDF Renewables and Kowepo started mobilising to construct the 500MW Manah 1 solar IPP project in Oman, as MEED reported in September.

    The solar power plant will span over 7.8 square kilometres in Oman’s Al-Dakhiliyah governorate. 

    The developer intends to deploy over 1 million bifacial photovoltaic (PV) modules mounted on a single-axis tracker system for the plant.

    A project company, Wadi Noor Solar Power Company, has been formed to deliver and operate the project for 20 years.

    The company will work with Australia-headquartered Worley, which has recently been appointed as the owner engineer for the project.

    Oman Power & Water Procurement Company (OPWP) signed the 20-year power-purchase agreements (PPA) for the Manah 1 and Manah 2 solar IPP projects in March this year.

    Both plants are expected to be operational by 2025.

    A team of Singapore’s Sembcorp Industries (Sembcorp) and China-headquartered Jinko Power Technology was awarded the 500MW Manah 2 solar PV IPP contract.

    Manah 1 and 2 were previously named Solar IPP 2022 and 2023.

    To be located 150 kilometres southwest of Muscat, the Manah 1 and 2 solar projects comprise the second utility-scale renewable energy projects to be tendered by OPWP, after Ibri 2, which has been operational since 2021.
    Jennifer Aguinaldo
  • Masdar and OMV sign green hydrogen agreement

    8 December 2023

    Abu Dhabi Future Energy Company (Masdar) and Austrian energy and chemicals firm OMV have signed a preliminary agreement to partner in the production of green hydrogen for the decarbonisation of industrial processes in OMV’s refineries.

    The non-binding heads of terms (HoT) agreement forms the basis of a joint agreement to develop an industrial large-scale electrolysis plant, which will be powered by renewable energy, Masdar said in a statement on 8 December.

    The statement added that the partners will collaborate to develop the project and plan to make a final investment decision in the second half of 2024.

    The HoT signing follows an initial memorandum of understanding (MoU), which the two parties signed in Abu Dhabi earlier this year.

    The agreement with OMV is a step in the right direction towards building a robust hydrogen value chain and supports Masdar's ongoing aim of 1 million tonnes of green hydrogen per annum globally by 2030, according to Masdar's chief green hydrogen officer, Mohammad Abdelqader el-Ramahi.

    Green hydrogen oasis

    According to MEED data, there are at least 12 known and planned green hydrogen projects in the UAE, with a budget of at least $12bn.

    In addition to the planned $5bn green hydrogen hub planned by Masdar and French utility developer and investor Engie, the other major planned green hydrogen projects in Abu Dhabi involve its largest industrial firms, including Abu Dhabi National Energy Company (Taqa), Emirates Steel, Fertiglobe and Brooge.

    One of these projects, the 150MW green hydrogen-based ammonia production facility planned in Ruwais, is expected to reach a financial investment decision (FID) shortly.

    The UAE's Green Hydrogen Strategy envisages the production of 1.4 million tonnes a year (t/y) of hydrogen by 2031, with green hydrogen accounting for 70 per cent of the target.

    This is expected to increase to 7.5 million t/y by 2040 and 15 million t/y by 2050.
    Jennifer Aguinaldo
  • Sheikh Mohammed inaugurates Dubai CSP plant

    7 December 2023

    Sheikh Mohammed bin Rashid al-Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, has inaugurated the fourth phase of the Mohammed bin Rashid al-Maktoum (MBR) Solar Park in Dubai.

    The 950MW fourth phase of the MBR solar park required an investment of AED15.78bn ($4.34bn).

    It uses hybrid technologies: 600MW from a parabolic basin complex, 100MW from the CSP tower, and 250MW from solar photovoltaic (PV) panels.

    The independent power producer (IPP) project features the tallest solar tower in the world, at 263.126 metres, and a thermal energy storage facility with a capacity of 5,907 megawatt-hours (MWh), the world's largest according to the Guinness World Records.

    The project covers an area of 44 square kilometres. It features 70,000 heliostats that track the sun’s movement. The molten salt receiver (MSR) on top of the solar power tower is the core and the most important part of the CSP plant. It receives solar radiation and turns it into thermal energy.

    The MSR contains over 1,000 thin tubes that enable the absorption of sun rays and their transfer to the molten salt within these tubes.

    The project can power approximately 320,000 residences with clean and sustainable energy. It will reduce carbon emissions by about 1.6 million tonnes annually.

    The completion of the project's fourth phase brings the total capacity of the MBR solar park to 2,863MW so far. The phases and their capacities are:

    • 13MW solar PV phase one: Completed in 2013
    • 200MW solar PV phase two: Commissioned in 2017
    • 800MW solar PV phase three: Commissioned in 2020
    • 950MW hybrid CSP/solar PV phase four: Inaugurated in 2023
    • 900MW solar PV phase five: Commissioned in 2023

    Dewa is aiming for the MBR development to reach 5,000MW of capacity by 2030. It recently awarded the UAE-based Masdar the contract to develop the solar park's sixth phase, which has capacity of 1,800MW.

    Project background

    Dubai Electricity & Water Authority (Dewa) awarded a consortium of Saudi Arabia’s Acwa Power and China's Silk Road Fund the contract to develop a 700MW CSP plant with storage for the fourth phase scheme in November 2017. Since then, the project has been expanded to include a 250MW solar PV component.

    Acwa Power then awarded Shanghai Electric the $3.8bn EPC contract for the hybrid CSP/PV plant in early 2018.

    The project reached financial closure in March 2019. The cost will be met through $2.9bn of debt and $1.5bn of equity.

    According to the project structure, Dewa is to provide $750m, or half of the project equity. Project developers Acwa Power and the Silk Road Fund will provide 51 per cent and 49 per cent, respectively, of the remaining equity.

    The fourth phase project achieved a tariff of 7.3 $cents a kilowatt hour ($c/kWh) for the CSP component and 2.4$c/kWh for the PV capacity, two of the lowest tariffs for CSP and PV solar technology in the world at the time of award.

    Dewa holds a 51 per cent stake in the project company, Noor Energy 1, set up to develop the plant, with Acwa Power and the Silk Road Fund holding the remaining stake. The developer consortium has signed a 35-year power-purchase agreement to supply power to Dubai’s grid.

    Photo: Wam

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  • Firms win Saudi Landbridge

    7 December 2023


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    The team of US-based Hill International, Italy’s Italferr and Spain’s Sener has been awarded the contract to provide project management services for the estimated $7bn Saudi Landbridge project.

    The Landbridge is a rail project that will connect the Red Sea coast of Saudi Arabia in the west and the Gulf coast in the east. It is one of the largest infrastructure projects planned in Saudi Arabia. The scheme is being implemented by the Saudi Railway Company (SAR).

    Project scope

    The project comprises six lines. The first line involves upgrading the Jubail Industrial City internal network, which is currently under construction. It will require 10 kilometres (km) of track to be built.

    The second is the upgrade of the Jubail to Dammam railway line, which is also currently under construction. It will require 35km of track to be built.

    The third line involves the upgrade of the Dammam to Riyadh railway line, with 87km of track to be built. 

    The fourth line, known as the Riyadh bypass, is from the existing network in the north of the city to the south. It is split into two packages: the first has 67km of track, and the second has 35km.

    The fifth line is a link from Riyadh to Jeddah and then on to King Abdullah Port with three stations at Jamuma, Moya and Al-Doadmi. The Riyadh to Jeddah line will have 920km of track, and the Jeddah to King Abdullah Port link will have 146km of track.

    The sixth line is a new 172km line from King Abdullah Port to Yanbu Industrial City.

    There will also be seven logistics centres: Jubail Industrial City Logistics Centre, Damman Logistics Dry Port, a relocated Riyadh Dry Port, King Khalid Airport Logistics Centre in Riyadh, Jeddah Logistics Dry Port, King Abdullah Port Logistics Centre and Yanbu Industrial City Logistics Centre.

    Contractor negotiations

    MEED reported in November that negotiations with the Saudi China Landbridge Consortium that will build the rail link are in the final stages.

    The consortium signed a memorandum of understanding to implement the project on a public-private partnership basis in October 2018. It was formed by SAR and China Civil Engineering Construction Company.

    Al-Ayuni Contracting was named as the local partner for the consortium. Other members include French firms Systra and Thales; Canada’s WSP; Aldhabaan & Partners, the local partner of UK legal consultancy Eversheds & Sutherland; ALG Infrastructure; and Calx Consultancy.
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  • Siemens Energy wins five Iraq substation contracts

    6 December 2023

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    Iraq's Electricity Ministry has awarded Germany-headquartered Siemens Energy a contract to deliver five high-voltage substations on a turnkey basis in Iraq.

    The 400-kilovolt (kV) substations will be installed in Baghdad, Diyala, Najaf, Karbala and Basra.

    Each substation will have a capacity of 1,500MW. Work on the substation projects is expected to commence in early 2024.

    German export credit agency Allianz Trade Trust, formerly Euler Hermes, will provide most of the project financing in collaboration with Iraq's Finance Ministry.

    MEED understands the substations address the increasing demand for power transmission in Iraq, providing power to around 2.5 million homes.

    On 5 December, a consortium led by K&K Group, which includes Siemens Energy, announced that it is moving ahead with a detailed study for an electricity corridor, known as Green Vein, whose initial stage will have the capacity to transmit up to 3GW of clean electricity from Egypt to Italy.

    Italian companies Cesi and Prysmian Group comprise the rest of the consortium planning to develop the Green Vein project.

    It entails the installation of a submarine high-voltage, direct current (HVDC) cable, which extends approximately 2,800 kilometres and reaches sea depths of up to 3,000 metres.

    The cable will connect the West Sohag area in Egypt to the Dolo substation near the Mestre Industrial Area in Italy.

    The project's initial capacity of 3GW equates to approximately 5 per cent of Italy's peak electricity demand.

    Image: Pixabay
    Jennifer Aguinaldo