Qatar’s return to economic normality
8 January 2024
Diplomacy, not economics, was the flavour of the fourth quarter for Qatar, which has become active again in the conflict resolution arena in recent months, mediating in disputes as far apart as Gaza and Venezuela.
Qatar’s efforts in November to secure a truce in the war between Israel and Hamas secured particularly favourable headlines for Prime Minister and Foreign Affairs Minister Sheikh Mohammed bin Abdulrahman bin Jassim al-Thani and Minister of State Mohammed bin Abdulaziz al-Khulaifi.
Regretfully, the humanitarian truce proved short-lived, and further efforts by Qatar, Egypt and others to forge a broader ceasefire have yet to succeed – though Doha has had successes elsewhere with its mediation efforts in recent months.
Equally important in terms of cementing Doha’s ties with Washington was Qatar’s role in securing the release of US prisoners in Venezuela on 20 December. Qatar’s involvement led to 10 American inmates being allowed to go home, in return for one Venezuelan. Al-Khulaifi said of the Venezuelan deal that it was part of a broader mediation effort to reduce tensions between the two countries.
It was certainly appreciated by Washington, with US ambassador to Doha, Timmy Davis, saying in response: “Once again, Qatar has proven itself an indispensable ally to the United States.”
The positive US sentiment towards Qatar has also been reflected in the new year by a deal between the two countries for the renewal of the US military presence at the expansive Al-Udeid Air Base for another 10 years.
More broadly, Qatar’s recently renewed wave of diplomacy efforts harks back to previous initiatives by Qatar to promote itself as a leading global mediator. From 2008-16, it worked on reducing tensions and forging peace agreements in about 10 regional and international conflicts.
These diplomatic efforts took something of a back seat as the country built itself up for the 2022 football World Cup, but it now appears that the government’s appetite for a role as an instrument of soft power has returned.
Economic heading
At the same time, it remains a pressing concern for Doha to develop a replacement anchoring economic initiative to follow in the wake of its World Cup boom. Such direction is currently lacking, and that was palpably evident when details of the state’s budget for 2024 were issued on 21 December.
Outside of the energy sector, there are only a handful of strategic projects that are continuing, such as a national cancer hospital – and nothing on the scale of the stadium and infrastructure build-out for the football tournament, which sustained the country’s non-hydrocarbons economic growth for a decade.
There are only a handful of strategic projects that are continuing – and nothing on the scale of the stadium and infrastructure build-out for the football tournament
Several more large events are scheduled to take place in the coming years, including the 2030 Asian Games, but none are likely to rival the World Cup in terms of spending or impact.
Overall, expenditure is set to reach QR200.9bn ($55.2bn) in 2024, just 1 per cent higher than the year before. Public sector salaries and wages will account for QR64bn of that total, up 2.4 per cent year-on-year. However, major capital expenditure is down 8.3 per cent.
Based on the highly conservative estimate of an average oil price of $60 a barrel in 2024, compared to $65 a barrel in 2023, Qatar’s revenues are set to decrease by 14.5 per cent to QR159bn this year. This reduction will be partly offset by an expected 2.4 per cent rise in non-oil revenues to QR43bn.
In a press conference on 21 December, Finance Minister Ali bin Ahmed al-Kuwari said that if spending remains at the projected level, the budget will produce a surplus of QR1.1bn, compared to the 2023 budget surplus estimate of QR29bn. However, Qatar also plans to pay off QR7.3bn of debt during the year, meaning the exchequer is projected to realise a deficit of QR6.2bn.
James Swanston, Middle East and North Africa economist at London-based Capital Economics, said the spending plans could yet be expanded. “Qatar’s 2024 state budget showed a slight fiscal loosening … and, if anything, officials may raise spending even further,” he said.
There is plenty of room for manoeuvre given the country’s ample gas reserves and low debts. Qatar’s public debt shrank from 58.4 per cent of GDP in 2021 to 42.5 per cent in 2022 and is expected to continue to fall to 37.4 per cent by the end of this year.
The Washington-based IMF describes the trajectory of the post-World Cup economy as one of “normalisation”. In a statement issued on 21 November following a visit to Doha, IMF mission chief Ran Bi said: “After very strong performance in 2022, economic growth has been normalising, while the medium-term outlook remains favourable.”
The IMF expects annual output to expand by about 1.75 per cent in the period 2023-25, with the non-hydrocarbons sector growing at 2.75 per cent a year. The IMF’s forecast in October was based on a more optimistic oil price of $79.9 a barrel, however.
Energy expansion
In the absence of another national project of note, Qatar has been doubling down on its investments in the expansion and development of its upstream gas infrastructure.
In May, QatarEnergy awarded the $10bn contract for the development of two new liquefied natural gas (LNG) trains at North Field South to the joint venture of France’s Technip Energies and Greece’s Consolidated Contractors Company. This built on a similarly significant $13bn contract awarded in 2021 to Japan’s Chiyoda and Technip Energies to build four LNG trains as part of the North Field expansion project.
Doha also struck a series of long-term supply deals in 2023 for the output from the expanded North Field, including three 27-year contracts signed in October alone, covering the supply of 3.5 million tonnes a year (t/y) of LNG to both TotalEnergies and Shell, and 1 million t/y to Italian major Eni. The following month, Doha signed a deal to supply a further 3 million t/y over 27 years to China Petrochemical Corporation (Sinopec).
QatarEnergy chief executive and Minister of State for Energy Affairs, Saad al-Kaabi, said in mid-December that more deals were imminent. Meanwhile, on 28 December, QatarEnergy announced a five-year crude oil supply deal with a Singapore-based subsidiary of Shell, covering up to 18 million barrels a year from January 2024. Al-Kaabi said it was his company’s first-ever five-year crude sales agreement.
There remains a ready market for the country’s natural gas, not least as the world’s energy transition fuel of choice, as a halfway step away from more polluting oil and coal. Doha nevertheless knows that it needs to find more non-hydrocarbons revenue sources. In the IMF’s November statement, Bi said the country’s plans include “accelerating revenue diversification through further mobilisation of non-hydrocarbons tax revenues”, but exactly what this means in practice has yet to be spelt out.
MEED's February 2024 special report on Qatar includes:
> GOVERNMENT & ECONOMY: Qatar’s return to economic normality
> BANKING: Qatar’s banks adjust to new circumstances
> OIL & GAS: Qatar enters period of oil and gas consolidation
> POWER & WATER: Qatar power and water projects to take off
> CONSTRUCTION: Qatar construction enters reboot mode
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Exclusive from Meed
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Saudi Arabia to expand grid by 60% by 203021 March 2025
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Saudi Electricity Company profit falls by 33%21 March 2025
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Kuwait aims to tender key railway this year21 March 2025
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Abu Dhabi and US firms form $25bn power joint venture20 March 2025
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Saudi Arabia to expand grid by 60% by 2030
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State utility Saudi Electricity Company (SEC) aims to expand its power transmission network to approximately 160,000 kilometres (km) by 2030, up 60% over its existing network of about 99,800km.
An increased subscriber base and higher electricity consumption, as well as the integration of renewables, underpin plans to expand the SEC network over the next five years.
"By 2030, SEC aims to expand its transmission network to encompass approximately 160,000km of transmission lines, [and] install nine new high-voltage, direct current lines between regions and neighbouring countries," SEC said in its 2024 earnings report.
"These targets are underscoring our commitment to building a robust and future-ready grid infrastructure."
MEED understands that SEC energised 26 new transmission substations, increasing the kingdom's transmission network to 1,260, a 2.1% increase over 2023.
These new substations increased the cumulative substation capacity to 497,902 megavolt-amperes, a 2% growth over the previous year.
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An additional 24 substations and 4,327km of transmission lines are under construction to integrate about 34.4GW of renewable energy capacity into the grid by 2027.
Generation
SEC said generation capacity connected to the grid reached 92.15GW in 2024, up 6.9% over 2023, when installed capacity stood at 86.23GW.
The firm said its directly owned capacity of the total now stands at 56.4GW, representing 61% of the kingdom's total capacity.
Electricity production at SEC's plants surged 7.5% to 236.4 terawatt-hours in 2024.
The firm said that 1,580MW of generation capacity was added or restored to SEC's power plant fleet in 2024, while the liquid-to-gas conversion of the Riyadh power plant 10 (PP10) and phase one is expected to be completed this year.
SEC is working with local contracting company Alfanar, in addition to US-based original equipment manufacturer GE Vernova, to convert the plant's fuel feedstock to natural gas, a lower carbon intensity fuel compared to the crude oil and distillate that currently power the plant.
According to the Energy Institute, Saudi Arabia's total electricity generation in 2023 reached 422.9 terawatt-hours (TWh). Oil accounted for 152.1TWh, or about 36% of the total, while natural gas accounted for 265TWh, or 63%, and renewables made up 5.8TWh or 1%.
"Eight projects with a total capacity of 22.3GW are under transition by 2030," SEC said in its report.
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Battery storage
SEC has been procuring battery energy storage system (bess) plants, with the aim of boosting the reliability and flexibility of the kingdom's electricity grid.
The first 500MW bess project in Bisha has been completed, while work is under way for 22 gigawatt-hours of bess capacity across five projects that are under development.
SEC is also prequalified to bid for the first round of independent bess projects in the kingdom, which is being produced by Saudi Power Procurement Company.
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MEED’s April 2025 report on Saudi Arabia includes:
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
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> CONSTRUCTION: Reprioritisation underpins Saudi construction
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> BANKING: Saudi banks work to keep pace with credit expansionhttps://image.digitalinsightresearch.in/uploads/NewsArticle/13533430/main4249.jpg -
Saudi Electricity Company profit falls by 33%
21 March 2025
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The net profit of state utility Saudi Electricity Company (SEC) has decreased by 33% to SR6.9bn ($1.8bn) in its fiscal year ending 31 December 2024.
The company attributed the decline to higher operating costs, the final settlement of dues worth SR5.7bn to Saudi Aramco, and higher finance costs.
SEC settled long-standing disputed amounts with the government related to historical discrepancies in fuel quantities, pricing, handling costs and electricity tariffs in February.
Excluding non-recurring items in comparative periods yielded a normalised net profit of SR12.1bn, however, up 8.9% over the 2023 figure.
The firm's revenues increased 17.7% from SR75.3bn in 2023 to SR88.7bn last year.
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Adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) rose 11.2%, from SR33.9bn in 2023 to SR37.7bn in 2024, SEC said in its annual financial highlights.
The firm's cash flows from operating activities for 2024 increased to SR8.3bn due to positive working capital movements.
Capital expenditures also surged 44% in 2024 to an all-time high of SR60bn, as the firm invested in power infrastructure expansion, smart grid enhancements, generation efficiency improvements and service reliability upgrades.
SEC said that several credit ratings agencies have upgraded its ratings in 2024. Moody’s raised its A1 with a stable outlook rating of SEC to Aa3 with a stable outlook. Fitch Ratings upgraded SEC’s rating from A with a stable outlook to A+ with a stable outlook.
As a result, the company’s credit ratings are now aligned with Saudi Arabia's sovereign ratings.
Financing growth
In 2024, SEC completed several financing deals, with a total value of SR57.2bn, to support ongoing investment in future growth. These comprised sukuk (Islamic bond) issuances, including taps, worth SR10.9bn, and US dollar syndication and term loans worth SR46.3bn.
SEC also redeemed $3.5bn-worth of sukuk, including $4.5bn in local sukuk and $800m in international sukuk in January 2024 and $1.5bn in international sukuk in April 2024.
MEED’s April 2025 report on Saudi Arabia includes:
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
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> TRANSPORT: Riyadh pushes ahead with infrastructure development
> BANKING: Saudi banks work to keep pace with credit expansionhttps://image.digitalinsightresearch.in/uploads/NewsArticle/13533410/main1020.jpg -
Kuwait aims to tender key railway this year
21 March 2025
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Kuwait’s Public Authority for Roads & Transportation (Part) is aiming to tender the main contract for its planned Kuwait National Rail Road (KNRR) project before the end of this year, according to industry sources.
The contract is expected to have an estimated value of KD300m ($973m), sources said.
Earlier this year, the design contract for the project was issued to Turkiye’s Proyapi Muhendislik ve Musavirlik Anonim Sirketi.
One source said: “Proyapi is being pushed very hard on the design for this project. They are preparing tender documents now and Part has made it clear that it wants the invitation to bid issued before the end of the year.”
Originally, Part had wanted to use a build-operate-transfer (BOT) model for the contract, but it has now decided that an engineering, procurement and construction contract will be used.
One source said: “In the end, it was decided that this contract was just too big to be tendered using the BOT model and it would limit the number of companies that wanted to participate in the tender process.”
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The KNRR forms part of the GCC rail network. GCC railway projects have been progressing with renewed impetus following the signing of the Al-Ula declaration by the six member states in January 2021.
One source said: “A lot of work has been done on the wider regional project and Kuwait is coming under increasing pressure from its neighbours to move this project forward.”
The GCC railway network is expected to be completed by 2030.
Once completed, the Gulf railway network will span 2,177 kilometres, linking Kuwait City in the north to Oman in the south, passing through several other Gulf countries.
In November 2024, MEED reported that Kuwait’s Central Authority for Public Tenders had received five offers for the tender, and that Turkiye’s Proyapi Muhendislik ve Musavirlik Anonim Sirketi had submitted the lowest bid with a price of KD2.4m ($8m). This was less than half the price of the KD6.7m bid submitted by China Railway Siyuan Survey & Design Group Company.
The other two bidders were Spain’s Sener, with a price of KD8.8m, and France’s Systra, with a price of KD9.7m.
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Abu Dhabi and US firms form $25bn power joint venture
20 March 2025
Abu Dhabi-based critical infrastructure-focused sovereign investor ADQ and US-headquartered Energy Capital Partners (ECP) have agreed to establish a 50:50 partnership to build new power generation and energy infrastructure.
ECP is the largest private owner of power generation and renewable facilities in the US.
The firms plan to make total capital investments of more than $25bn across 25GW-worth of projects, with the US as the primary focus.
The combined initial capital contribution from the partners is expected to amount to $5bn.
“The partnership will focus on serving the needs of data centres and industrial centres in the US and selected other international markets over the long-term,” ADQ said in a statement on 19 March, a day after UAE national security adviser and Abu Dhabi deputy ruler, Sheikh Tahnoon Bin Zayed Al-Nahyan, met with US President Donald Trump at the White House.
ADQ said the partnership aims to service the growing power needs of data centres, hyperscale cloud companies and other energy-intensive industries.
“As the continuity and quality of power supply is crucial for these high-growth industries, the need for captive power plants that are in proximity is often a prerequisite,” ADQ said.
The partnership is focused on meeting these needs over the long term, with its mandate including greenfield development, new build and expansion opportunity projects.
A portion of the capital may also be allocated to opportunities in selected other international markets.
The statement cited a recent report by the International Energy Agency (IEA) stating that the world’s electricity consumption is forecast to rise at its fastest pace.
The growing need for data centres and industrial electrification partly account for the surging consumption.
In the US, for instance, a substantial increase in electricity demand is expected to add the equivalent of California's current power consumption to the national total over the next three years.
Recent research also forecasts that global power demand from data centres will increase by 50% by 2027 and by as much as 165% by the end of the decade, driven by the expansion of artificial intelligence (AI) and high-density data centres.
The US Department of Energy estimates that data centre load growth has tripled over the past decade and is projected to double or triple by 2028.
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QatarEnergy LNG receives bids for decarbonisation project
20 March 2025
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QatarEnergy LNG has received bids from contractors for a carbon dioxide (CO2) sequestration complex project covering its liquefied natural gas (LNG) production operations in Qatar’s Ras Laffan Industrial City (RLIC).
Once commissioned, the planned sequestration facility will be capable of capturing 4.3 million tonnes a year (t/y) of CO2 from QatarEnergy LNG’s production operations in RLIC.
Contractors submitted bids for the project, estimated to be valued at $2bn-$2.5bn, by the deadline of 13 March, sources told MEED.
The following contractors are among those that are understood to have submitted bids for engineering, procurement and construction (EPC) works on the QatarEnergy LNG CO2 sequestration project:
- Chiyoda (Japan) / Consolidated Contractors Company (Greece/Lebanon)
- Larsen & Toubro Energy Hydrocarbon (India)
- Samsung C&T (South Korea)
The planned sequestration facility will capture CO2 from seven LNG trains at the QG North complex and three LNG trains at the QG South complex. The CO2 captured from the trains is to be compressed and injected into new injection wells, for which new compression trains and pipelines need to be installed.
The EPC scope of work on the project covers the following:
- QG North complex:
- Installation of four new electric-driven compressors
- New power substation for power import from Kahramaa 65MW
- New ITR for DCS/ESD/F&G
- Tie-ins with utility units
- Dehydration package
- Pig launcher
- QG South complex:
- Installation of two new electric-driven compressors
- Integration with South injection system unit 85
- Solvent reformulation for South trains 1/23
- New power substation for power import from Kahramaa 35MW
- New SIH for DCS/ESD/F&G
- Tie-ins with utility units
- Dehydration package
- Chillers package
- Pig launcher
- RLIC corridors
- Common 22-inch export pipeline stretching 18 kilometres
- Power tie-in RLF3 with Kahramaa
- Electric cables
- Fiber optic cable
- Lot W15
- Six injection wells by QatarEnergy LNG subsurface
- Six injection flowlines and metring skid
- Six wellhead control panels
- Power tie-in from Barzan
- Substation
- Pig receiver
- Access road and fencing
QatarEnergy LNG awarded Australia-headquartered consultancy Worley a contract in September 2023 for the execution of the front-end engineering and design (feed) work on the project, as well as to prepare the EPC scope of work.
North Field LNG expansion
Meanwhile, QatarEnergy LNG, a subsidiary of state enterprise QatarEnergy, continues to press forward with its North Field LNG expansion programme.
The estimated $40bn North Field LNG expansion programme aims to raise Qatar’s total LNG production capacity from 77.5 million t/y to 142 million t/y in three phases.
QatarEnergy is understood to have spent almost $30bn on the two phases of the North Field LNG expansion programme, North Field East and North Field South, which will increase its LNG production capacity from 77.5 million t/y to 126 million t/y by 2028.
EPC works on the two projects are making progress.
QatarEnergy awarded the main EPC contracts in 2021 for the North Field East project, which is projected to increase LNG output to 110 million t/y by this year. The main $13bn EPC package, which covers the engineering, procurement, construction and installation of four LNG trains with capacities of 8 million t/y each, was awarded to a consortium of Japan’s Chiyoda Corporation and France’s Technip Energies in February 2021.
QatarEnergy awarded the main EPC contract for the North Field South LNG project, worth $10bn, in May 2023. The contract covers two large LNG processing trains, each with a capacity of 7.8 million t/y, and was awarded to a consortium of Technip Energies and Lebanon-based Consolidated Contractors Company.
When fully commissioned, the first two phases of the North Field LNG expansion programme will contribute a total supply capacity of 48 million t/y to the global LNG market.
In February 2024, QatarEnergy announced the third phase of its North Field LNG expansion programme. To be called North Field West, the project will further increase QatarEnergy’s LNG production capacity to 142 million t/y when it is commissioned by 2030.
The North Field West project will have an LNG production capacity of 16 million t/y, which is expected to be achieved through two 8 million t/y LNG processing trains, based on the two earlier phases of QatarEnergy’s LNG expansion programme. The new project will draw feedstock for LNG production from the western zone of Qatar’s North Field offshore gas reserve.
February's special report on Qatar includes: > COMMENT: Doha works to reclaim spotlight
> ECONOMY: Qatar economy rebounds alongside diplomatic activity
> BANKING: Qatar banks look to calmer waters in 2025
> UPSTREAM: QatarEnergy strives to raise gas and oil production capacity
> DOWNSTREAM: Qatar chemical projects take a step forward
> POWER & WATER: Facility E award jumpstarts Qatar’s utility projects
> CONSTRUCTION: Qatar construction shows signs of recovery
> DATABANK: Qatar maintains stable growth headinghttps://image.digitalinsightresearch.in/uploads/NewsArticle/13525489/main2030.jpg