meed-logo

line1 line2 line3
SIGN IN / REGISTER

Region advances LNG projects with pace

30 August 2024

 

Global liquefied natural gas (LNG) liquefaction capacity is expected to more than double by 2028, potentially increasing from 473 million tonnes a year (t/y) in 2023 to 968 million t/y in 2028 through new build and expansion projects, according to a recent report by GlobalData.

North America dominates globally among the regions, in terms of new build and expansion liquefaction capacity growth, contributing around 54% of the total global capacity additions or 268 million t/y by 2028, GlobalData says in the report. 

The Middle East comes in at second position, followed by the Former Soviet Union, with capacity additions of 78 million t/y and 71 million t/y, respectively. 

Since the start of this decade, there has been a sharp increase in investments in the Middle East and North Africa (Mena), and particularly in the Gulf region, in projects to expand LNG production. Capital expenditure close to $45bn has been made by Mena hydrocarbon producers in the past 10 years on various LNG projects, mainly for output capacity building, MEED Projects data shows. Almost three-fourths of that spending took place in the past four years, and predominantly in the GCC.

A desire to cater to the steady growth expected in global LNG demand and dominate the global supply market is fuelling the wave of investments into large-scale production capacity expansions and terminal construction by Gulf players.

Qatar guns for top spot

Qatar has been jostling with the US and Australia for the status of being the largest LNG provider to the world for many years now. The three countries have all clinched the top spot, only to be unseated by another the very next month.

However, when its mammoth North Field LNG expansion programme begins to come online later this decade, Qatar will be able to consolidate its position as the world’s largest producer and exporter of LNG in the long term.

State enterprise 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 tonnes a year (t/y) to 126 million t/y by 2028. Engineering, procurement and construction (EPC) works on the two projects are making steady 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 2025. The main $13bn EPC package, which covers the engineering, procurement, construction and installation of four LNG trains with capacities of 8 million t/y, was awarded to a consortium of Japan’s Chiyoda Corporation and France’s Technip Energies in February 2021.

QatarEnergy awarded the $10bn main EPC contract for the North Field South LNG project, covering two large LNG processing trains, to a consortium of Technip Energies and Lebanon-based Consolidated Contractors Company (CCC) in May last year.

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.

Qatar is, however, not stopping at that. QatarEnergy, in February, announced a 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 derives its name from the western zone of Qatar’s North Field offshore gas reserve, from where it will draw feedstock for LNG production.

Oman moves up the ladder

Oman has been supplying LNG to customers, mainly in Asia, for many years now. Majority state-owned Oman LNG operates three gas liquefaction trains at its site in Qalhat, with a nameplate capacity of 10.4 million t/y. Due to debottlenecking, the company’s complex now has a production capacity of about 11.4 million t/y.

As recently as late July, the Omani government announced that Oman LNG will build a new train at its Qalhat LNG production complex in Sur, located in the sultanate’s South Al-Sharqiyah governorate. Oman LNG will perform the preliminary engineering study for the planned LNG train.

The LNG train will have an output capacity of 3.8 million t/y. When commissioned in 2029, it will increase Oman LNG’s total production capacity to 15.2 million t/y.

Aside from Oman LNG, France’s TotalEnergies has now committed itself to becoming a major LNG supplier in the sultanate. In partnership with state energy holding conglomerate OQ, TotalEnergies achieved final investment decision earlier this year for a major LNG bunkering and export terminal in Oman’s northern city of Sohar.

TotalEnergies leads a joint venture named Marsa LNG, which is the Sohar LNG terminal project developer. Marsa LNG was formed in December 2021 through an agreement between TotalEnergies and the sultanate’s state energy holding company OQ. The partners own 80% and 20% stakes, respectively.

Marsa LNG intends to develop an integrated facility consisting of upstream units that will draw natural gas feedstock from TotalEnergies’ hydrocarbon concessions in the sultanate, particularly from Blocks 10 and 11; an LNG bunkering terminal and storage units located in Sohar port; and a solar photovoltaic plant to power the LNG terminal.

The Marsa LNG terminal will have a single train with the capacity to process about 1 million t/y of natural gas into LNG. The bunkering terminal will mainly supply LNG as a marine fuel to vessels. Marsa LNG has picked France-based Technip Energies to perform EPC works on the estimated $1bn LNG terminal project.

Adnoc gives shape to ambitions

Abu Dhabi National Oil Company (Adnoc) has been a relatively smaller LNG producer in comparison to its GCC peers. Adnoc Group subsidiary, Adnoc Gas, operates three large gas processing trains on Das Island. At its Das Island terminal, Adnoc Gas has an LNG liquefaction and export capacity of about 6 million t/y. The first and second trains were commissioned in the 1970s and have a combined output capacity of 2.9 million t/y. The third train came into operation in the mid-1990s, with a capacity of 3.2 million t/y.

Adnoc Gas’ LNG production and export capability, however, will receive a major fillip when a new greenfield terminal it has committed to developing in Ruwais, Abu Dhabi, comes online before the end of this decade. The planned LNG export terminal in Ruwais will have the capacity to produce about 9.6 million t/y of LNG from two processing trains, each with a capacity of 4.8 million t/y.

Adnoc awarded the full EPC contract and achieved the final investment decision for the LNG terminal complex in June. A consortium of France’s Technip Energies, Japan-based JGC Corporation and Abu Dhabi-owned NMDC Energy was awarded the EPC contract, worth $5.5bn.

Jordan takes a step forward

Jordan imports more than 90% of its oil, gas and refined product needs and therefore has a strong economic case for developing projects to boost its domestic hydrocarbon infrastructure, particularly for gas.

The country recently took a key step forward when Aqaba Development Corporation awarded the main EPC contract in August for a project to develop the Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah LNG onshore regasification facility at the port of Aqaba.

The contract was won by a consortium of Singapore-based AG&P and South Korea’s Gas Entec, along with their local partner, Jordan’s Issa Haddadin.

In a statement, Gas Entec said that the facility will have the capacity to process 720 million cubic feet a day of natural gas. 

“Jordan relies heavily on natural gas for its power and industrial needs, but faces challenges with supply reliability,” Gas Entec said.

“The new LNG terminal will provide Jordan with the flexibility to access LNG from various global suppliers, ensuring a stable and secure energy source.”

Global LNG demand set for steady growth

https://image.digitalinsightresearch.in/uploads/NewsArticle/12432924/main.gif
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Jordan’s Nepco obtains $70m finance for grid

    21 February 2025

    The European Bank for Reconstruction & Development (EBRD) and the EU have approved a €67.1m ($70.2m) financing package for Jordan's state-owned utility, National Electric Power Company (Nepco).

    The financing package consists of a sovereign-guaranteed EBRD loan of up to $56.5m and an EU investment grant of up to €12.4m.

    These funds will finance the construction of a new high-voltage electricity substation in northern Jordan to improve the grid’s capacity, enabling it to handle existing and new generation in the north of the country, said EBRD

    The new substation will not only improve the grid’s ability to handle additional generation capacity, but also facilitate cross-border interconnections, as well as reduce transmission losses by optimising power flows across the national grid.

    The project to be financed will include the construction of four new overhead transmission lines: two 400-kilovolt (kV) lines providing connections to the existing Samra and Amman West substations, and two 132kV lines connected to the Hasan Industrial and Jerash substations.

    These projects support Jordan's ambitious renewable energy targets for 2030.

    The financing will be complemented by a comprehensive technical cooperation package. An EU-funded technical cooperation grant of €2.2m will also be provided to appoint a project implementation consultant for Nepco.

    Nepco is the owner and operator of Jordan’s transmission system, as well as the single buyer of electricity.

    Since the start of its operations in Jordan in 2012, the EBRD has invested almost €2.3bn across 74 projects, providing more than €815m to projects in the country’s energy sector through 14 loans.

    In February 2023, Jordan's Water & Irrigation Ministry and the local firm Arab Towers Contracting Company signed an agreement worth €79.5m ($84.7m) for the design and implementation of a wastewater treatment plant in the Ghabawi region. EBRD provided a €41.3m loan while the EU agreed to provide a €30m grant for the project.

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13414961/main.jpg
    Jennifer Aguinaldo
  • Saudi Arabia capacity buildout enters busiest period

    21 February 2025

    Saudi Arabia has entered what could be the busiest period for power generation capacity buildout in its entire history.

    According to data from regional projects tracker MEED Projects and MEED, a total of 53GW of power generation capacity is under construction or about to start construction following the formal award of contracts or the selection of bidders.

    Generation and cogeneration plants powered by natural gas account for two-thirds, or 66.7%, of the total capacity under construction, with renewable plants, mainly solar, accounting for the rest.

    Solar and wind power plants, however, dominate the pre-execution pipeline, accounting for roughly 94% of the capacity that is currently under bid or prequalification.

    Inclusive of projects in the study and design phase, the total thermal and renewable generation capacity being planned and tendered in Saudi Arabia stood at around 80GW as of February 2025.

    The major capacity buildout is in line with the kingdom's liquid displacement programme as well as its target for renewable energy sources to account for half its electricity production by 2030.

    According to the Energy Institute, Saudi Arabia's total electricity generation in 2023 reached 422.9 terawatt-hours (TWh). Oil accounted for 152.1 TWh, or about 36%, of the total, with natural gas accounting for 265TWh, or 63%, and renewables, 5.8TWh or 1%.

    CCGT plants

    The urgency of displacing its oil-fired fleets underpins the successive contract awards for combined-cycle gas turbine (CCGT) power generation plants, which are being developed as independent power projects (IPPs) or via engineering, procurement and construction (EPC) contracts.

    Roughly 47% of the 35.8GW of gas-fired capacity under construction is being built via an EPC or design and build model, mainly by the Saudi  Electricity Company (SEC), while the rest are being built using an IPP model.

    Of the total thermal capacity under construction, about 45% will be generated by greenfield power plants that are being built as an expansion to existing power generation facilities across the kingdom.

    Chinese contractors such as Sepco 3 and China Energy Engineering Corporation, among others, are constructing 10 of the 19 gas-fired power generation and cogeneration plants that are under execution in Saudi Arabia. An eleventh plant is being constructed by Sepco 3 in partnership with Doosan Enerbility, of South Korea. The 11 plants equate to a capacity of roughly 21GW.

    South Korean contractors, mainly Doosan and Samsung C&T are in four of the 19 projects.

    "I think the Chinese EPC contractors are already at capacity, so SEC has started tapping Egyptian and Spanish EPC contractors," an industry source tells MEED, in reference to Tecnicas Reunidas, Orascom and Elsewedy, which have been selected to undertake the EPC contracts for several CCGT plants last year.

    The peak for new gas-fired contract awards may have passed, however.

    MEED Projects data indicate that four cogeneration plants with a combined capacity of around 1.5GW  are in the pre-execution stage. And, only at least two gas-fired IPP schemes - Shoaiba and Al-Shuqaiq - are currently under study, each with a planned capacity of 2.6GW.

    However, a "surprise"  new project, such as the 3GW expansion of the Qurayyah IPP, announced on 20 February, cannot be ruled out. 

    Renewables  

    A reverse trend could be seen for renewable solar power generation capacity.

    As of February 2025, nearly all renewable energy capacity under construction in Saudi Arabia is being developed as IPPs.

    Around 43% of these IPPs are publicly tendered by the principal buyer, Saudi Power Procurement Company (SPPC), while the rest are directly negotiated between the Saudi sovereign vehicle, Public Investment Fund (PIF), and the dominant local utility developer, Acwa Power.

    The pre-execution pipeline for solar and wind energy projects, which will be procured by SEC and gigaproject developer Neom, is staggering, especially given a directive by the Energy Ministry to procure up to 20GW of renewable energy capacity annually until 2030 subject to demand growth.

    "It is a massive pipeline," notes a Dubai-based senior transaction adviser.

    However, he also notes that a re-scoping process is under way especially for renewable energy projects designed to cater to Neom, the $500bn development in northwestern Saudi Arabia, which aims to be powered 100% by renewables by 2030.

    Issues related to land allocation may also become an issue if it has not yet, notes another industry expert.

    Deployment of additional renewable energy capacity will also require a major battery energy storage system buildout, which started last year, to ensure the flexibility of the electricity grid. 

    "The question is how much batteries they will need and how much batteries will be available to support that ambition," the consultant said.    

    Data centres

    In addition to the liquid displacement programme and the 50% renewable energy production target by 2030, Saudi Arabia has been seeing a major uptick in data centre construction projects in line with a plan to become a major artificial intelligence (AI) hub.

    Hyperscalers such as Amazon Web Services, Google and Microsoft plan to expand their digital or cloud infrastructure in Saudi Arabia in line with this strategy. These and other AI  players, as well as local firms such as DataVolt, Ezditek, Alfanar and the UAE-based Gulf Data Hub, among others, pledged around $15bn of investments in such infrastructure during the recently concluded Leap technology conference in Riyadh, with more investments expected to be announced over the coming months or years.

    These projects, assuming they all come to fruition, will significantly increase computing, cooling and overall electricity demand. The need to make these advanced data centres as sustainable as possible will also further incentivise the kingdom's national renewable energy programme.

     

     

       

     

     

      

     

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13414408/main.gif
    Jennifer Aguinaldo
  • Hyundai E&C wins $389m Saudi grid contracts

    21 February 2025

    South Korea’s Hyundai Engineering & Construction (E&C) has won two power transmission line contracts worth approximately $389m in Saudi Arabia.

    The transmission lines will be built in Saudi Arabia's Medina and Jeddah regions, the firm said.

    The 380-kilovolt (kV) Humaiji transmission network will extend 311 kilometres and transfer power from a solar power plant in Humaiji to a substation in the Medina area.

    The 380kV Kulais transmission network will extend 180 kilometres and transmit power from a solar facility planned for construction in the coastal Kulais area to an existing transmission network in Jeddah.

    The project owner is Saudi Electricity Company, which conducted a competitive bidding process among a selected number of engineering, procurement and construction (EPC) companies, said Hyundai E&C.

    In November, Hyundai E&C won a KRW1tn ($725m) contract to build a high-voltage direct current (HVDC) network project in Saudi Arabia.

    The contract forms part of a 1,089-kilometre (km), 500-kilovolt (kV) HVDC transmission line connecting Riyadh Power Plant 14 (PP14) to the Kudmi substation in southwest Saudi Arabia.

    The company signed the contract to build the transmission line's first package, which extends over 369km, with National Grid, the power transmission unit of state utility Saudi Electricity Company (SEC).

    The lump sum turnkey project is expected to be completed by January 2027.

    Photo credit: Hyundai E&C

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13413980/main.jpeg
    Jennifer Aguinaldo
  • Sojitz-backed Capella eyes Middle East PPPs

    20 February 2025

     

    Public-private partnership (PPP) projects across the Middle East will be a key focus for Sydney-headquartered infrastructure developer and investor Capella Capital, according to two sources familiar with the matter.

    "The Middle East … is one of the potential markets to expand the business portfolio of Capella," one of the sources said.

    MEED understands that the region is included in Capella's medium- to long-term growth strategy.

    This development follows the acquisition of the company by Japanese infrastructure investor Sojitz in January this year.

    Valued at AUD470m ($300m), the acquisition is targeted for completion in June this year.

    Sojitz says the acquisition is in line with its efforts to "strengthen its large-scale infrastructure development capability in the energy, social and transportation infrastructure fields" in Australia, as well as in global markets.

    It will also support Sojitz's transformation into an "integrated business model that manages projects from initial formation to asset management".

    Capella will likely follow the entry into the Middle East PPP market of fellow Australian infrastructure investor, Plenary Group.

    Abu Dhabi holding company ADQ acquired a 49% stake in Plenary in April 2024, including all shares owned at the time by the Canadian pension fund Caisse de Depot et Placement du Quebec.

    In a statement issued in September last year, ADQ said the two firms plan to establish a co-investment platform, which will focus on public and social infrastructure opportunities "in high-growth geographies including the GCC region, the Middle East and Central Asia".

    In August last year, the Abu Dhabi Investment Office (Adio) appointed a team of Plenary, Belgian firm Besix and the local Mazrui International for a contract to develop and operate a 3,250-bed student accommodation complex and associated facilities at Khalifa University in Abu Dhabi. 

    Plenary is also part of a consortium that is understood to be planning to bid for the first two packages of the $22bn Dubai Strategic Sewerage Tunnels project.  

    In April 2023, Saudi Arabia launched a pipeline of 200 PPP projects in 17 sectors. Adio is responsible for coordinating PPP projects in Abu Dhabi, while Oman's Finance Ministry oversees the sultanate's planned PPP projects. 

    Photo credit: Pixabay (for illustrative purposes only)

    READ THE FEBRUARY MEED BUSINESS REVIEW

    Trump unleashes tech opportunities; Doha achieves diplomatic prowess and economic resilience; GCC water developers eye uptick in award activity in 2025.

    Published on 1 February 2025 and distributed to senior decision-makers in the region and around the world, the February MEED Business Review includes:

    > WATER & WASTEWATER: Water projects require innovation
    https://image.digitalinsightresearch.in/uploads/NewsArticle/13411316/main5649.jpg
    Jennifer Aguinaldo
  • SEC and Acwa Power sign Qurayyah IPP expansion deal

    20 February 2025

    Register for MEED’s 14-day trial access 

    Riyadh-based utility firm Saudi Electricity Company (SEC) and Acwa Power have signed a power-purchase agreement with the principal buyer, Saudi Power Procurement Company, for the expansion of the Qurayyah independent power project (IPP) in Saudi Arabia.

    The Qurayyah IPP expansion project will have a generation capacity of 3,010MW and is expected to be carbon capture-ready, the two firms said in separate bourse filings on 20 February.

    SEC and Acwa Power will each have an effective shareholding of 40% in the project, which is valued at SR13.4bn ($3.57bn).

    Hajj Abdullah Alireza & Company (Haaco) will own the remaining 20%. 

    The three firms will develop, finance, build, own and operate the combined-cycle gas turbine plant.

    The project also includes the development, financing, construction and transfer of a 380-kilovolt (kV) electrical substation.

    The project duration is 25 years from the plant commercial operation date.

    Acwa Power, South Korea's Samsung C&T, Mena Infrastructure Fund and SEC own Hajr Electricity Production Company, the development company behind the existing 3.9GW Qurayyah 1 & 2 IPP in Saudi Arabia.

    The Qurayyah 1 & 2 IPP reached commercial operations in 2015.

    The expansion of the Qurayyah IPP is not to be confused with a separate engineering, procurement and construction (EPC) project with the same name.

    Egyptian contractor Orascom is understood to be undertaking the EPC contract for the 3.6GW Qurayyah EPC project.

    MEED reported in September 2024 that Orascom had received limited notice to proceed on the project from SEC.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13411202/main4001.gif
    Jennifer Aguinaldo