Meed | Oman diversifies hydrocarbons value chain

Oman diversifies hydrocarbons value chain

17 December 2023

Oman’s efforts to diversify its hydrocarbons value chain and derive more economic benefits from it are gaining traction.

State energy conglomerate OQ is pushing ahead with oil and gas projects aligned with its Oman Vision 2040 goals of achieving energy security, increasing revenues for the sultanate, and expanding its business portfolio into new energy frontiers such as hydrogen.

Oman aims to become a leading green hydrogen hub, producing 1 million tonnes a year (t/y) of green hydrogen by 2030 and 8.5 million t/y by 2050. Achieving this will require a total capital expenditure budget of $140bn, with a further investment of $230bn to unlock the hydrogen export economy.

While Muscat takes steps to establish a thriving green hydrogen ecosystem, OQ and its partners are also moving forward with plans to realise the sultanate’s blue hydrogen potential.

Hydrogen foray

OQ Gas Networks (OQGN), a subsidiary of OQ, is understood to be making progress with a project to build a cross-country hydrogen transport pipeline network, following its initial public offering (IPO) and listing on the Muscat Stock Exchange in October.

“While most discussion surrounds green hydrogen, there is also the potential for blue hydrogen production … which would provide additional long-term support to gas flows through the natural gas transportation network (NGTN) and is increasingly likely given the probable surplus upstream gas capacity,” OQGN said in its IPO prospectus.

“Blending hydrogen into gas streams could be an interim strategy to kickstart hydrogen production before demand is sufficient to justify investments in dedicated hydrogen pipelines,” the company added.

To that end, OQGN commissioned a feasibility study in 2022 to assess how much hydrogen could be introduced into the NGTN “before adverse effects would be noticeable and too expensive to mitigate”.

The company is understood to have advanced the study in 2023, and is expected to firm up the project’s engineering, procurement and construction tendering schedule in 2024.

OQGN also signed a memorandum of understanding with Belgium-based energy infrastructure company Fluxys International in October to jointly explore cooperation in developing hydrogen and carbon-capture projects in Oman.

Separately, the UK/Dutch Shell is studying the prospect of establishing a blue hydrogen and blue ammonia production facility in Oman, according to a local media report.

The company is considering Duqm, located in the southeast of the sultanate on its Arabian Sea coastline, as the location for the proposed project.

Shell is understood to be collaborating with the majority state-owned Petroleum Development Oman (PDO) for the planned blue hydrogen and blue ammonia production complex.

Through the project, Shell intends to tap into the recovery and storage of carbon dioxide discharged from its operations, while PDO plans to produce blue hydrogen.

Oman’s Energy & Minerals Ministry is supporting Shell in its study of the technical and commercial feasibility of the project, according to the report.

Raising upstream capacity

Maintaining oil and gas production capacity in the long term continues to be a priority for Oman.

In November, OQ awarded Canada-based Enerflex the main contract for a project to expand the production potential of the Bisat oil field in the sultanate. Enerflex will undertake the project, estimated to be valued at $200m, on a design, build, own, operate and maintain (DBOOM) basis.

The project represents the latest expansion phase of the Bisat oil field, situated in central Oman’s Block 60 hydrocarbons concession. Discovered in 2017, the Bisat oil field consists of about 165 oil wells and three crude oil processing plants.

The first crude oil processing plant at the field started operations in August 2019 and the second began running in September 2021. The third plant was commissioned on a trial basis in November 2022.

OQ raised production at the Bisat oil field from 5,000 barrels a day (b/d) in 2019 to 55,000 b/d by the third quarter of 2022. This is understood to be the fastest annual growth in oil field production in the Middle East.

In January 2023, OQ announced that the Bisat oil field development had attained a production milestone of 60,000 b/d.

Gas production project

The majority state-owned PDO is preparing to issue the main tender for a project to build an integrated facility to produce gas from the Budour and Tayseer fields in 2024.

The project aims to expand the capacity of the existing gas production and processing facility at Tayseer. It represents the second development phase of the gas field. PDO also seeks to appraise, produce and process sweet gas from the Budour field, about 50 kilometres west of the Tayseer field.

PDO intends to appoint a contractor to deliver the combined Budour-Tayseer sour gas processing facility project on a DBOOM basis. It is projected to have a capacity of 78.39 million cubic feet a day (cf/d) and 1,167 cubic metres a day (cm/d) of unstabilised condensate.

The facility will handle gas exports of about 70 million cf/d and stabilised condensate exports of 950 cm/d, with a water handling capacity of 340 cm/d.

MEED's January 2024 special report on Oman also includes:

> ECONOMY: Muscat performs tricky budget balancing act
> BANKING: Omani banks look to projects for growth
> POWER & WATER: Oman expands grid connectivity

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Indrajit Sen

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Jedco maps next phase of Jeddah airport expansion
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Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

The packages cover terminal buildings and ancillary facilities, runways, taxiways and aprons, hangars, fuel systems, airside facilities, supporting infrastructure and utility networks.

Tendering and award activity will be staggered over the next two years. Airfield rehabilitation is targeted for Q3 2026. The construction framework is scheduled for Q4 2026 and will run for five years.

The T3A package is planned for Q1 2027 and will be delivered under an early contractor involvement contract. Local contractors are encouraged to bid as part of a joint venture with an experienced international partner.

T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

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Contractor wins $105m Medina university hospital deal

22 September 2026

Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

The contract scope includes structural completion, remaining civil works, mechanical, electrical and plumbing installations, specialised clinical fit-outs and medical gas infrastructure to bring the long-stalled facility into operation.

Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

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Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

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> TUNNELS: The Gulf’s next construction boom is happening underground

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

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Oman tenders Thumrait Industrial City infrastructure
22 September 2026

Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

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Kuwait halves drilling contractor pool
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State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
- Burgan Company for Well Drilling, Trading & Maintenance (Kuwait)
- Kuwait Drilling Company (Kuwait)
- Sun Drilling Kuwait (Kuwait)
- TDL Kuwait for Oil Rigs & Natural Gas Extraction Activities, Services and Facilities (Kuwait)
- United Precision Drilling (Kuwait)
- Abraj Energy Services (Oman)
- Adnoc Drilling Company (UAE)
- Arabian Drilling Company (Saudi Arabia)
- Anton Oilfield Services (China)
- China Oilfield Services (China)
- Egyptian Drilling Company (Egypt)
- CNPC Bohai Drilling Engineering Company (China)
- Great Wall Drilling Company (China)
- John Energy (India)
- Kerui Oilfield Service (China)
- KCA Deutag Drilling (Germany)
- Mohammed Al-Barwani Petroleum Services (Oman)
- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

21 September 2026

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Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

This includes a 5.2GW Abu Dhabi solar and battery energy storage system (bess) round-the-clock renewable energy project, as well as three 1.5GW solar photovoltaic independent power projects (IPP): Al-Ajban, Al-Khazna and Al-Zarraf.

It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

As previously reported, it is expected that the developer's agreement for the 3.3GW Al-Nouf 1 CCGT IPP will be signed by the end of the year, while contractors are preparing to submit bids for a separate 2.6GW power plant project in Ajman.

The expansion of solar and battery storage is expected to reduce the system's reliance on gas-fired generation. However, gas-fired generation will continue to provide flexibility to support the system and balance intermittent renewable power output, according to Ewec.

The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.