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Neom’s top five projects

11 October 2023

Neom has awarded major contracts over the past two years, indicating the kingdom's flagship development project is moving ahead as planned. It has also attracted local and international investment partners for the implementation of these projects.

Except for the Neom Green Hydrogen project, the majority of the contracts that have been awarded so far are for basic infrastructure such as roads, staff accommodation and utilities.

Below is a round-up of the top five projects that are under construction at Neom.

  1. NGHC Green Fuels Renewable Energy Project

Saudi Arabia’s Neom Green Hydrogen Company (NGHC), a consortium of Neom, Saudi utility developer Acwa Power and the US' Air Products is developing a green fuels renewable energy facility, which will produce hydrogen to be synthesised into carbon-free ammonia for export exclusively by Air Products to global markets.

The planned facility will integrate 4GW of renewable power from solar, wind and storage that will be used for the production of 650 tonnes a day of hydrogen and nitrogen and 1.2 million tonnes a year of green ammonia.

In June 2022, Indian contractor Larsen & Toubro (L&T) secured a major engineering, procurement, and construction (EPC) contract worth $2.7 billion from NGHC for the renewable energy package of the programme.

L&T has since awarded several sub-contracts for different elements of the project. These include the supply contract for the wind turbines to China's Envision Energy, the supply of 380 kV gas-insulated substations to US-based GE Grid Solutions, the supply of solar trackers to Spanish PV Hardware and, most recently, the contract to inverter skid solutions to Chinese company Sungrow.

  1. NEOM Community Villages: Wave 1

In June, Neom finalised SR21bn ($5.6bn) of public-private partnership (PPP) housing deals for worker accommodation. The developers for the first phase of its residential communities, also known as Wave I, include local companies Alfanar Global Development, Almutlaq Real Estate Investment Company, Nesma Holding Company and Tamasuk, which is involved through two separate partners, Al-Majal al-Arabi Group Company and Saudi Arabian Trading & Construction Company (Satco).

The scheme involves building ten communities across Neom, adding capacity for 95,000 more occupants once the project's first phase is completed. The temporary accommodation needed during Neom's construction period is being built sustainably as relocatable modular units that can be repurposed once the communities are no longer required.

The tender for a second phase of the project, known as Wave II, is expected to be issued to the market in the coming months.

 

  1. NEOM Backbone Infrastructure: Drill and Blast Running Tunnels

Tunnel projects worth over $4.6bn are in the execution phase at Neom. These include the backbone infrastructure tunnels for The Line project, which involve constructing two railway tunnels in parallel using the drill-and-blast method, one for passengers and the other for goods.

In June 2022, Neom awarded $2.7bn-worth of main contracts to the joint venture of Shibh al-Jazira Contracting, China State Construction Engineering and FCC Construction for lots two and three of this scheme.

A separate contract worth about $1.8bn was awarded by Neom for lots four and five to a team of Archirodon, Samsung Engineering and Hyundai Engineering.

Beijing-based China Railway Construction Corporation (CRCC) was awarded a contract in 2021 for the adits and portals package serving the bored tunnels.

  1. NEOM Oxagon Connector South

In May, Neom awarded a joint venture of Italy-based Webuild and Riyadh-headquartered Shibh al-Jazira Contracting (Sajco) an estimated $2bn contract to build the Connector South rail line that will link Oxagon with The Line at Neom.

The contract involves the construction of a 75-kilometre railway line, including earthworks, 14 viaducts, seven roads, nine rail underpasses, 152 culverts (pipe and box culverts), a freight line, infrastructure maintenance depots and associated facilities.

The infrastructure corridor will run south from The Line to Neom City Station through Neom Bay Mansions, Neom Bay airport and on to Oxagon.

  1. NEOM Oxagon Port

Crown Prince Mohammed bin Salman launched Oxagon in late 2021. It includes onshore elements as well as floating structures offshore. Construction works on the 48 square-kilometre, eight-sided industrial city have already started.

In January, Neom awarded a contract to deliver the first phase of the port expansion. A team of Boskalis, Besix and the local Modern Building Leaders (MBL) was awarded that estimated SR3bn ($800m) contract in mid-January.

It was followed by another $1bn contract award in October to Belgium’s Deme with Greece’s Archirodon to complete phase two of the Duba port expansion at Oxagon industrial city.

The scope of the Duba port expansion package includes excavation and dredging, revetments for channel widening, demolition, container terminal quay expansion and earthworks, in addition to the development of a flexible quay, a roll-on/roll-off (RoRo) berth and quay walls to a marine services berth and a coast guard facility.

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Yasir Iqbal

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    > COMMENT: Saudi projects hold steady
    > GOVERNMENT: Riyadh looks to reset its regional defence outlook
    > ECONOMY: Conflict bolsters case for Saudi economic diversification
    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
    > POWER: Saudi Arabia’s power award activity slows
    > WATER: Saudi water sector hits sharp slowdown
    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
    > DATABANK: Saudi data indicates project spending shift

    To see previous issues of MEED Business Review, please click here
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    Colin Foreman