meed-logo

line1 line2 line3
SIGN IN / REGISTER

Regional downstream sector prepares for consolidation

30 December 2024

 

The Middle East and North Africa (Mena) region’s midstream and downstream oil, gas and petrochemicals sectors together had one of their best years on record in 2024, with state-owned companies and private players collectively spending close to $38bn on projects.

Saudi Arabia emerged as the biggest regional spender on midstream and downstream projects. To address incremental volumes of gas entering the grid as Saudi Aramco increases its conventional and unconventional gas production, the state enterprise has spent more than $17bn on gas processing and transportation projects this year.

In April 2024, Aramco awarded $7.7bn in engineering, procurement and construction (EPC) contracts for a project to expand the Fadhili gas plant in the Eastern Province of Saudi Arabia. The project is expected to increase the plant’s processing capacity from 2.5 billion cubic feet a day (cf/d) to up to 4 billion cf/d.

On 30 June, Aramco awarded 15 lump-sum turnkey contracts for the third expansion phase of the Master Gas System (MGS-3), worth $8.8bn. Then, in August, the company awarded contracts for the remaining two packages of the MGS-3 project, which were worth $1bn. 

Saudi Aramco divided EPC works on the MGS-3 project into 17 packages. The first two packages involve upgrading existing gas compression systems and installing new gas compressors. The 15 other packages relate to laying gas transport pipelines at various locations in the kingdom.

The Master Gas System expansion will increase the size of the network and raise its total capacity by an additional 3.15 billion cf/d by 2028 with the installation of about 4,000 kilometres
of pipelines and 17 new gas compression trains.

Abu Dhabi capex

The UAE has been the second-largest spender on midstream, downstream and chemicals projects in 2024, led by investments from Abu Dhabi National Oil Company (Adnoc) and Taziz – its 60:40 joint venture with industrial holding entity ADQ.

Adnoc’s biggest capital expenditure (capex) was in the form of a $5.5bn EPC contract that it awarded to a consortium of France’s Technip Energies, Japan-based JGC Corporation and Abu Dhabi-owned NMDC Energy to develop a greenfield liquefied natural gas (LNG) terminal complex in Ruwais. 

The upcoming Ruwais LNG export terminal will have the capacity to produce about 9.6 million tonnes a year (t/y) of LNG from two processing trains, each of which has a capacity of 4.8 million t/y. When the project is commissioned, Adnoc’s LNG production capacity will more than double to about 15 million t/y.

Adnoc Group subsidiary Adnoc Gas has also advanced a project to expand its sales gas pipeline network across the UAE, which is known as Estidama. The Abu Dhabi-listed company has awarded two EPC packages of the project this year, which together were worth more than $500m. 

Adnoc Gas is expected to award the contract for another Estidama package before the end of 2024 that covers the construction of a pipeline that will provide feedstock from its Habshan gas processing plant to the upcoming Ruwais LNG complex.

Taziz, meanwhile, awarded three EPC contracts totalling $2bn for infrastructure works at the industrial chemicals zone that it is developing in Ruwais Industrial City.

Spending to plateau

Having reached a peak in spending, and with EPC contracts awarded for strategic midstream, downstream and chemicals projects in 2024, the Mena region is set to enter a period of more pragmatic project spending in 2025. However, this does not imply that a slump in project capex is likely, and the region could once again equal the level of contract awards made in 2024.

One of the largest projects that may be awarded in 2025 is the main contract for the North Field West LNG project – the third phase of QatarEnergy’s LNG expansion programme. 

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.

Taziz is also on course to make progress with the second expansion phase of its derivatives complex, which will more than double the number of chemicals produced at the industrial hub. The expansion’s centrepiece will be a large-scale steam cracker that will supply feedstocks to the several new chemical plants earmarked for third-party investments.

In Saudi Arabia, there has been speculation that Aramco may be revisiting its investment strategy and execution approach for its strategic liquids-to-chemicals programme. 

The aim of the programme is to derive greater economic value from every barrel of crude produced in the kingdom by converting 4 million barrels a day (b/d) of Aramco’s oil production into high-value petrochemicals and chemicals feedstocks by 2030.

Aramco has divided its liquids-to-chemicals programme into four main projects. It took a major step forward
in September 2023 by selecting US firm KBR, France’s Technip Energies, UK-based Wood Group and Australia- headquartered Worley to provide project management consultancy services for the four different segments of the scheme.

Progress on a programme as big as the liquids-to-chemicals scheme is expected to be measured and laboured. 

While day-to-day the advancement might appear sluggish, Amin Nasser, Aramco’s president and CEO, said earlier in 2024 that the Saudi energy giant is on track to achieve its crude oil-to-chemicals conversion goal by 2030.

“We are on track to achieve our target of 4 million b/d liquids-to-chemicals [conversion capacity] by 2030,” he said.

Meanwhile, Kuwait is in a similar situation with its planned Al-Zour integrated complex upgrade programme (Zicup), which has suffered significant delays in recent years. However, state-owned Kuwait Integrated Petroleum Industries Company (Kipic), the project’s operator, recently appointed a team to look into the logistics of developing a benzine pipeline as part of the estimated $10bn Zicup scheme.

Although this may be a small step, it does indicate that Kuwait remains determined to achieve its ambition of developing a large-scale petrochemicals facility, which, when integrated with its $16bn Al-Zour refinery, could become one of the biggest integrated refining and petrochemicals complexes in the Mena region.

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/13145202/main.gif
Indrajit Sen

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

Click here to register
Exclusive from Meed
Related Articles
  • Kuwait tenders two Al-Mutlaa City construction packages

    2 September 2026

    Register for MEED’s 14-day trial access 

    Kuwait’s Public Authority for Housing Welfare (PAHW) has tendered two contracts covering the construction of public buildings across five districts at its Al-Mutlaa City residential project.

    The first tender covers construction in the N5 and N6 districts, while the second covers N1, N3 and N4.

    The tenders were issued on 30 August, with a bid submission deadline of 30 September.

    The project is a housing scheme located 38.3 kilometres northwest of the Kuwait metropolitan area.

    It covers approximately 104 square kilometres and is expected to house up to 400,000 people.

    The mixed-use development will include residential, social, commercial and light industrial areas.

    In March 2023, MEED reported that PAHW had appointed France-based Egis as a project management consultant for the Al-Mutlaa City development.

    Under the agreement, Egis is providing programme-level service management, construction logistics and interface management services.

    The scope of work also includes cost management, a digital programme management system and a project management information system for the scheme.

    Al-Mutlaa City is one of the largest housing infrastructure projects being developed by the government as part of Kuwait’s Vision 2035.

    UK analytics firm GlobalData expects Kuwait’s construction industry to grow at an average annual rate of 7.1% in 2025-28, supported by investment in renewable energy, transport and oil and gas projects, as well as spending under the New Kuwait 2035 National Development Plan.

    Under this strategy, the government plans to invest KD350m ($1.1bn) to develop several sports projects in the country.

    The residential construction sector is expected to register average annual growth of 3.8% in 2025-28, supported by the government’s plan to build 65,500 housing units by 2029 through five projects.

    MEED’s September 2026 report on Kuwait includes:

    > COMMENT: Kuwait keeps dealmaking alive under fire
    > GOVERNMENT: Kuwait shows tentative signs of economic development
    > BANKING: Necessity is the mother of invention for Kuwaiti lenders
    > OIL & GAS: Regional war to have lasting impact on Kuwaiti oil sector
    > POWER & WATER: Kuwait utilities investment shifts towards water
    > CONSTRUCTION: Kuwait construction holds up despite regional strife
    > MARKET TALK: Kuwait stands resilient amid regional tensions

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19245517/main.png
    Yasir Iqbal
  • Preferred bidders emerge for Zatca residential PPP

    2 September 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Zakat, Tax and Customs Authority (Zatca), through the National Centre for Privatisation and PPP (NCP), has selected preferred bidders to develop residential buildings at various land ports across the kingdom.

    The project covers developments across nine land ports, separated into two packages.

    Local firm Saudi Arabian Trading & Construction Company has been selected as the preferred bidder for the first package, which includes the Al-Batha, Salwa, Al-Raqi, Jadidat Arar, Al-Wadiah and Empty Quarter sites.

    Bahrain-headquartered Lamar Holding is the preferred bidder for the second package, which includes land ports at Al-Hadithah, Halat Ammar and Al-Durrah.

    The project will be implemented as a public-private partnership (PPP) on a design, build, finance, operate, maintain and transfer basis, with a contract duration of 23 years, including the construction period.

    The contract covers the construction and management of new residential buildings and associated facilities at the land ports, as well as the rehabilitation of existing facilities.

    The project is the latest scheme in the kingdom’s PPP pipeline. In January, Saudi Arabia launched a national privatisation strategy aimed at mobilising $64bn in private sector capital by 2030.

    Building on the privatisation programme first introduced in 2018, the strategy focuses on unlocking state-owned assets for private investment and privatising selected government services.

    In a statement, NCP said the strategy comprises 147 opportunities drawn from a broader pipeline of more than 500 projects across 18 sectors.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19244076/main.jpg
    Yasir Iqbal
  • Egypt signs PPA for 1GW Ras Shokeir wind farm

    2 September 2026

    Register for MEED’s 14-day trial access 

    A joint venture of the local Hassan Allam Utilities Energy and Infinity Power has signed a power purchase agreement (PPA) with Egyptian Electricity Transmission Company (EETC) for the development of the 1GW Ras Shokeir wind project in Egypt.

    The project is located in Egypt’s Red Sea Governorate, within the Gulf of Suez wind corridor. It will cover approximately 143 square kilometres.

    The PPA has a 25-year term. The project will supply electricity to Egypt’s national grid.

    Ras Shokeir is expected to generate enough electricity to power more than 1.2 million Egyptian homes. It is also expected to avoid more than 1.36 million tonnes of CO2 emissions annually.

    The PPA was signed by EETC chairperson Mona Rizk and Infinity Power co-founder and CEO Nayer Fouad, representing the Infinity Power-Hassan Allam consortium.

    The signing brings the project closer to development as Egypt seeks to expand its renewable energy capacity. Egypt has set a target for renewable energy to make up 42% of the electricity mix by 2030 and 65% by 2040.

    This includes the 500MW Amunet 2 wind project, which is being developed by UAE-headquartered Amea Power following the commissioning of the first Amunet wind project in June 2025.

    Hassan Allam Utilities Energy and Infinity Power are also developing Egypt’s $560m West Minya solar plant, which will combine 1,000MWac of solar photovoltaic capacity with a 600MWh battery energy storage system.

    In June, MEED reported that a joint venture of Hassan Allam Construction and India’s Sterling & Wilson Renewable Energy had won the engineering, procurement and construction contract for the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19242701/main1603.jpg
    Mark Dowdall
  • NWC confirms $347m Saudi sewage treatment plant deal

    2 September 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s National Water Company (NWC) has signed a contract worth more than SR1.3bn ($347m) with a Saudi-Chinese consortium to rehabilitate, operate and maintain nine sewage treatment plants (STPs).

    The 15-year contract covers plants located across the Hail, Qassim, Al-Jouf and Northern Borders provinces. The plants have a combined treatment design capacity of more than 337,000 cubic metres a day (cm/d).

    MEED exclusively reported in January that the consortium comprising China’s Jiangsu United Water Technology and Saudi-based Armada Holding had won the contract for the project.

    The contract is for the Northern Cluster Sewage Treatment Plants Package 10 (LTOM10) and includes an initial three-year period for rehabilitation and upgrade works, followed by long-term operation and maintenance.

    NWC said the contract was signed with a tariff of SR0.69 ($0.18) a cubic meter.

    As MEED understands, United Water will be responsible for design, financing, operation and part of the construction works. Saudi Arabia’s Armada Holding will handle construction, equipment import customs clearance and local business communications. UAE-registered Prosus Holding will act as the financial investor.

    LTOM packages

    The same consortium is also expected to sign a contract for Package 11 of the LTOM programme in the coming months.

    In April, MEED exclusively reported that the consortium won the contract for this project, which will have a combined capacity of about 440,000 cm/d.

    Bids for North Western B Cluster (LTOM12) remain under evaluation. The contract covers the construction and upgrade of seven STPs with a combined capacity of about 162,000 cm/d.

    NWC also tendered the Eastern A Cluster (LTOM14) package in April, covering the upgrade of six existing STPs with a capacity expansion of 30,000 cm/d at the Al-Jarodia STP.

    This will increase total treatment capacity from about 263,000 cm/d to approximately 293,000 cm/d, with an estimated cost of $180m.

    The bid submission deadline is 30 September.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19242964/main.jpg
    Mark Dowdall
  • Iraq looks to accelerate oil pipeline projects

    2 September 2026

    Iraq’s Ministry of Oil has held talks with a delegation from Qatari company UCC on accelerating the progress of two major pipeline projects, according to a statement from Iraq’s Office of Media and Government Communication.

    The first proposed pipeline route extends from Basra, in southern Iraq, to Haditha, located about 200 kilometres northwest of Baghdad, then on to Faysh Khabur, which lies on the border with Syria and near the border with Turkiye.

    The second pipeline extends from Haditha to Syria’s coastal city of Baniyas.

    Discussions covered the contract type, implementation timeline and “other technical matters”, according to the statement released by the Iraqi government.

    During the meeting, Iraq’s Minister of Oil, Basem Mohammed Khudair Al-Abadi, emphasised the need to expedite the tendering process for the project contracts.

    He said all obstacles to progress on the projects needed to be eliminated.

    He also said weekly meetings will be held between relevant parties to reach agreements on the economic models for the pipelines and their routes.

    The Ministry of Oil said UCC is leading a consortium of companies developing the projects.

    It added that the consortium includes US-based Chevron, the investment company TI Capital and France’s TotalEnergies.

    In July, Iraq’s cabinet approved Basra Oil Company signing a ​heads of agreement and a non-disclosure agreement with the consortium to explore possible future oil pipeline projects.

    Under the terms of the agreement, the consortium will prepare technical and financial feasibility studies for strategic export pipeline projects.

    Also in July, US-based KBR was awarded a consultancy contract for the section of pipeline due to extend from Basra to Haditha.

    In April, Iraq announced the allocation of $1.5bn for the Basra-Haditha route, while the larger scheme is estimated at around $5bn.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19241649/main.jpg
    Wil Crisp