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
  • Iraq awards Baghdad airport PPP deal

    29 October 2025

    Register for MEED’s 14-day trial access 

    Iraq has awarded a contract to develop Baghdad International airport on a public-private partnership (PPP) basis to a consortium comprising Luxembourg-based Corporacion America Airports (CAAP) and local firm Amwaj International.

    According to local media reports, the estimated $764m contract covers the rehabilitation of airport infrastructure, construction of a new passenger terminal, and operations and maintenance under a 25-year concession.

    In a statement on its website, the Ministry of Transport said the airport’s initial capacity is expected to be around 9 million passengers, gradually increasing to 15 million.

    Iraq’s Ministry of Transport and General Company for Airports & Air Navigation Services received the bids earlier this month, MEED reported.

    The bidding consortium included:

    • Asyad Holding / Top International Engineering Corporation / Lamar Holding / YDA Insaat / Dublin Airport Authority (Saudi Arabia/Saudi Arabia/Saudi Arabia/Turkiye/Ireland) 
    • Corporacion America Airports / Amwaj International (Luxembourg/Iraq)
    • ERG International / Terminal Yapi / ERG Insaat (UK/Turkiye/Turkiye)

    The media report added that the winning consortium offered the government 43.05% of total airport revenues.

    The Asyad-led consortium offered 38.05%.

    The ERG International-led consortium was disqualified from the bidding process.

    The International Finance Corporation (IFC), a member of the World Bank Group, is the project’s lead transaction adviser.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14971278/main.jpg
    Yasir Iqbal
  • Saudi Electricity Company secures $3bn financing deal

    29 October 2025

    Saudi Electricity Company (SEC) has signed a $3bn financing agreement with a consortium of international banks at the Future Investment Initiative Forum (FII9) in Riyadh.

    The financing comes as SEC continues to expand its project portfolio to meet rising electricity demand. In September, SEC outlined plans to invest SR220bn ($58.7bn) in power projects between 2025 and 2030.

    This includes SR135bn ($36bn) and SR85bn ($22.7bn) for transmission and distribution, respectively, and is part of long-term plans to meet growing electricity demand while improving grid efficiency and reliability.

    The financing partners include the UAE's Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank and Emirates NBD.

    Also included are Bank of East Asia (Hong Kong), Bank of China, Barclays (UK), China Construction Bank, HSBC (UK), Industrial and Commercial Bank of China (China), ING (Netherlands) and Mega Bank (Taiwan)

    The state-controlled utility, majority-owned by the Public Investment Fund (PIF), has dominated procurement activity in the power sector in 2025, awarding approximately $6bn-worth of contracts.

    This has been led by two standalone projects in Dawadmi and Riyadh, each with a capacity of 500MW/2,000MWh and an estimated value of about $600m.

    The utility continues to advance other major developments including the PP13 and PP14 combined-cycle gas turbine (CCGT) power plants in Riyadh. In October, it signed $3.4bn in offtake deals for the plants, which have a total capacity of 3,356MW.

    It also recently reached financial close for Saudi Arabia’s Qurayyah CCGT independent power project (IPP) expansion.

    SEC will develop, finance, build, own and operate the 3,010MW plant as part of a consortium with Saudi Arabia's Acwa Power and Hajj Abdullah Alireza & Company (Haaco).

    Alongside its financing agreement, SEC launched a new Supply Chain Financing Programme during FII9 in partnership with local fintech Manafa and US-headquartered SAP Taulia, supported by the Saudi Industrial Development Fund.

    The initiative aims to improve liquidity across the energy supply chain and enable suppliers to access fast financing at more competitive rates.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14971266/main.jpg
    Mark Dowdall
  • Design work completed for $1bn Libyan pipeline

    29 October 2025

     

    Front-end engineering and design (feed) work has been completed for the major oil pipeline that will extend from oil fields in the south of Libya to the oil export terminal of Es Sider, according to industry sources.

    Libya’s Waha Oil Company, a subsidiary of state-owned National Oil Corporation (NOC), is developing the pipeline.

    The 700-kilometre pipeline will have a diameter of 32 inches and the capacity to transport 1 million barrels a day (b/d) of oil.

    One source said: “It is crucial that the existing pipeline is replaced. The existing pipeline is suffering frequent leaks and cannot handle higher pressures.

    “In 1960, when the pipeline was installed, the pipe thickness was 36mm, but it is now so worn out that this has been reduced to around 8mm across much of the pipeline. In some spots, it is even less than 8mm.

    “Production cannot be increased at the oil field due to this ageing facility.”

    Waha is preparing to eventually tender an engineering, procurement and construction (EPC) contract for the project, which is estimated to have a value of between $1bn and $1.25bn.

    Although the pipeline’s actual usage is unlikely to exceed 300,000 b/d for some time after its completion, it is being designed to be ready for a significant increase in oil production from Libya’s southern oil fields.

    It is unclear when Waha plans to issue an invitation to bid for the project’s EPC contract.

    In 2012, Waha announced a project to replace key oil pipelines in Libya, but funding issues delayed the timeline and invitations to bid were never issued.

    In January 2024, MEED reported that Waha was considering plans to boost its production by 1 million b/d.

    At the time, the subsidiary was producing about 300,000 b/d.

    Earlier this month, NOC announced that the country’s crude oil production had reached 1,383,430 barrels a day (b/d).

    The company said that natural gas production was 2,519 million cubic feet a day (cf/d), while condensate production was 49,013 b/d.

    NOC said it aimed to further increase production capacity to approximately 1.6 million cf/d by 2026.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14970171/main.jpg
    Wil Crisp
  • Qatari firm tenders Oman gabbro mining works

    29 October 2025

    Register for MEED’s 14-day trial access 

    Qatar Primary Materials Company (QPMC) has issued a tender for additional works at its gabbro mining development in the Khatmat Milaha area of Oman, close to a border crossing with the UAE.

    The broad scope of work involves the remaining works for two gabbro quarries and the construction of an export jetty at Khatmat Milaha, state-owned QPMC, also known as Al-Awalia, said in the tender notice.

    Firms have until 11 November to submit bids for the tender, QPMC said.

    QPMC owns a 3 million tonne‑a‑year (t/y) gabbro quarry at Khatmat Milaha in Oman, which is understood to have been commissioned in 2020. The quarry has an expandable capacity of 7 million t/y.

    The Omani quarry project had been planned for a number of years. In 2015, QPMC signed an agreement with Belgian firm Rent-A-Port to start work on the Khatmat Milaha quarry project.

    Rent-A-Port was the consultant for QPMC’s gabbro port in Qatar. A joint venture of Denmark’s FLSmidth and Sixco completed the estimated QR1.6bn ($430m) contract to build the aggregate berths in 2017. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14968152/main2817.jpg
    Indrajit Sen
  • Kuwait forms project company for Al-Zour North expansion

    29 October 2025

    Register for MEED’s 14-day trial access 

    Kuwait has formally established a new public shareholding company to manage the next stages of the Al-Zour North independent water and power plant (IWPP).

    The Gulf Alliance for Power & Water Company will be responsible for the construction, implementation, management, operation and maintenance of Al-Zour North IWPP phases two and three.

    The Al-Zour North phases two and three IWPP involves constructing a 2,700MW power plant and a 120-million-imperial-gallon-a-day desalination facility. The project’s total estimated value is approximately $4bn.

    In August, Saudi Arabia’s Acwa Power and Kuwait-based financial institution Gulf Investment Corporation (GIC) signed a contract to develop the project, which will be the country’s largest IWPP.

    The consortium of Acwa Power and GIC will hold 40% of the project company through Al-Zour Kuwaiti Second & Third Holding Company.

    The Public-Private Partnership Authority will hold 10% on behalf of government entities, while 50% will be offered to Kuwaiti citizens through a public subscription process.

    Al-Zour North IWPP phases two and three is owned by the Kuwait Authority for Partnership Projects (Kapp) and the Ministry of Electricity, Water & Renewable Energy.

    It will be developed under a build-operate-transfer model with a 25-year offtake agreement.

    Sepco3 is the EPC contractor for the project.

    The project company has been set up with an authorised and issued capital of KD197.032m ($639m).

    This capital is divided into 1.97 billion shares, each with a nominal value of 100 fils. The paid-up capital at the time of establishment is KD49.2m.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14963914/main.jpg
    Mark Dowdall