meed-logo

line1 line2 line3
SIGN IN / REGISTER

Riyadh to sustain power spending

12 March 2024

Latest news on Saudi Arabia’s power sector:

> Neom to start qualification for $2.7bn hydropower scheme
> Saudi power buyer holds Remah and Nairiyah meetings
> Enowa gives extra day for Gayal and Shiqri bidders
> Gayal and Shiqri bidders race to meet deadlines
> Neom extends Duba Energy Park bid deadline
> Data centre activity soars in Saudi Arabia
> US firm wins Al Kahfah solar tracker package
> Saudi-Omani team to set up transformers plant

 

The project pipeline in Saudi Arabia’s power generation sector continues to expand unabated.

The value of projects in execution or about to start construction has increased by 17% to $34bn compared to six months earlier, according to the latest available data from regional projects tracker MEED Projects.

The value of projects in the pre-execution phase similarly increased by 16% to reach $51bn during the same period. New schemes are expected to be announced in the coming 12-18 months, including power generation projects catering to the $500bn Neom development.

Two key factors underpin the ramp-up of both conventional and renewable energy generation capacity in the kingdom, notes a Dubai-based senior executive with an international developer.

“Saudi Arabia intends to become the renewable supplier of choice on the GCC grid,” the executive said, referring to the regional network linking the electricity grids of Bahrain, Kuwait, Oman, Qatar, the UAE and Saudi Arabia.

The second factor is the kingdom's push for industrialisation and urbanisation, including the adoption of electric vehicles and data centres.

“Saudi Arabia has very strong regulations to keep data within its domicile and the digitalisation needed to achieve the kingdom’s modernisation plans needs large data centres and corresponding electricity supply,” she notes.

Overall, Saudi Arabia awarded power generation contracts worth more than $16.1bn in 2023, which is higher than the total value of contracts awarded in the preceding eight years and nearly six times the value of contracts awarded in 2022.

The kingdom’s principal buyer, Saudi Power Procurement Company (SPPC) and its sovereign wealth vehicle, the Public Investment Fund (PIF), awarded the bulk of these contracts.

Shrinking renewables share

The share of renewable energy in the total value of awarded contracts shrunk to 28%, from about 82% in 2022, due to the award last year of the first gas-fired independent power producer (IPP) projects since 2016.

SPPC awarded a consortium comprising Saudi Electricity Company and Saudi utility developer Acwa Power the $3.9bn contract to develop and operate the Qassim 1 and Taiba 1 IPP projects in November 2023. Each combined-cycle gas turbine (CCGT) plant has a capacity of 1,800MW.

A team comprising the local Al Jomaih Energy & Water, France’s EDF and the local Buhur for Investment won the contract to develop the other pair of CCGT-based plants – the Taiba 2 IPP and Qassim 2 IPP schemes, each of which has a capacity of 1,800MW.

SPPC also awarded the contracts for the solar photovoltaic (PV) schemes under the fourth procurement round of the kingdom’s National Renewable Energy Programme (NREP).

A consortium that includes France's EDF Renewables, Abu Dhabi Future Energy Company (Masdar) and the local company Nesma won the contract to develop the 1,100MW Hinakiyah solar IPP project. A consortium led by China's Jinko Power won the contract to develop and maintain the 400MW Tubarjal solar IPP scheme.

The PIF, meanwhile, awarded contracts last year for the development of three solar PV schemes with a total combined capacity of 4.5GW to Acwa Power and its partner Water & Electricity Holding Company (Badeel). The 2GW Al Rass 2, 1.1GW Saad 2 and 1.4GW Al Kahfah solar PV IPPs require a total investment of about $3.4bn.

Unawarded projects

Following the award of these contracts, SPPC started the procurement process for four solar PV schemes with a total combined capacity of 3.7GW under the NREP fifth round, and four new CCGT schemes with a total combined capacity of 7.2GW.

Bids are due on 10 June for the 2GW Al Sadawi, 1GW Al Mas, 400MW Hinakiyah 2 and 300MW Rabigh 2 solar PV IPP schemes.

Bids are also due in late June for the Remah 1 and 2 and Al Nairiyah 1 and 2 gas-fired CCGTs.

As of early March, Neom’s utility subsidiary, Enowa, had received bids for two renewable energy engineering, procurement and construction (EPC) contracts, the 1.2GW Gayal wind farm and 800MW Shiqri solar farm.

Enowa is understood to be preparing a site for two CCGT plants to be built on a fast-track basis at Duba Energy Park. The first phase comprises a transportable gas turbine generator (GTG) with a capacity of 300MW, which is designed to deliver emergency power to Neom.

The second phase is a permanently installed 500MW facility comprising heavy-duty GTGs. Both are considered fast-track projects, with the first phase due for completion in early 2024 and the second phase in early 2025.

The first phase of a multi-gigawatt programme to build renewable energy capacity in Neom using a public-private partnership model is also expected to start soon.

Soaring costs

The raft of new projects coming to the pipeline is exerting pressure, particularly for the CCGT supply chain, experts tell MEED. “On average, the EPC prices have more than doubled since before the Covid-19 pandemic began,” says an executive working for an original equipment manufacturer (OEM).

The average EPC cost per kilowatt for CCGT plants with a capacity of over 1.5GW is understood to have reached approximately $750 a kilowatt in 2023, which is more than twice the average cost in 2019. EPC costs for smaller plants have similarly posted significant increases.

Industry sources say the turbine supply chain problem arises from the decision by some OEMs to reduce capacity over the past few years, driven by a combination of the Covid-19 pandemic and the threat of curtailed demand due to the push to decarbonise electricity systems.

The post-Covid-19 recovery, as well as the resurgence of demand for gas-fired power plants in the Middle East – and even in some countries in Europe – along with the expressed preference by most GCC clients for European-made gas turbines, has resulted in a seller’s market.

A Dubai-based OEM executive told MEED last year that its EU-made turbines are booked for several years, but order deliveries can still be shuffled between customers, so they do not expect major delays in delivering to clients. "It's definitely a seller's market right now for turbines. We have capacity in other regions like China, but customers prefer [turbines made in] EU factories”.

In comparison, the jury is still out on solar PV costs, although historical tariff data indicates a general upward trend between the record-low tariffs seen in 2021 and those submitted last year.

Transmission and distribution

Transmission and distribution (T&D) contracts exceeding a total of $12bn are under execution in Saudi Arabia, with an estimated $22.4bn in the pre-execution phase.

The value of contracts awarded in 2023, which sits at $4bn, exceeded the previous year’s total by 41%. The contract to build a high-voltage, direct current transmission system between Neom’s Oxagon industrial cluster and Yanbu is the largest T&D contract to have been awarded last year.

Volume-wise, 59 T&D contracts were awarded in Saudi Arabia last year compared to 64 in 2022.

Saudi Arabia has been gradually expanding the reach of its grid, both domestically – due to the development of new communities and industries and the growth of renewable energy capacity – as well as internationally.

Projects to link with Egypt and other countries in the GCC, as well as with Iraq and Jordan, are under way, while preliminary studies are ongoing to link the kingdom’s power grid further afield, including to the grids of India and Greece.

Energy storage and nuclear

A new project activity segment within Saudi Arabia’s power sector is emerging. SPPC intends to start the procurement process this year for the 2GW first phase of a project to procure 10GW of battery energy storage system (bess) capacity by 2030.

Bess comprises rechargeable batteries that can store and discharge energy from various sources when needed.

Saudi Arabia plans to locate its bess facilities near demand centres to boost the electricity grid's spinning reserves as more renewable energy is expected to enter its electricity production mix.

The 2GW first phase of the project entails building several plants at different locations, with individual capacities ranging from 50MW to 300MW each. 

Finally, the procurement process is moving – albeit slowly – on the Duwaiheen nuclear power plant, Saudi Arabia’s first large-scale nuclear power project. Bids for the main contract are due in late April, following several deadline extensions since the kingdom invited selected companies to bid for the contract in 2022.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11584212/main2905.gif
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • WEBINAR: End-of-Year Mena Market Review

    13 November 2026

    Webinar: The big questions shaping the Gulf market. You decide what gets debated.
    Tuesday 24 November 2026  | 11:00 AM GST  |  Register now

    What makes this session particularly interesting is that the audience gets to decide the agenda. Registrants can vote for the topics they’d like Ed and Colin to debate, with the most popular questions forming the final shortlist for the live session.

    Topics in the ballot:

    • Is the Gulf trying to build too much, too quickly?
    • Saudi Arabia or the UAE: where would you place your next big bet?
    • Are gigaprojects the best use of public money?
    • Who is really responsible when projects go wrong?
    • Should the lowest-price tender become a thing of the past?
    • Can private capital take over from the government in financing infrastructure and diversification?
    • Is the Gulf’s AI and data centre boom a smart bet or the next overbuilding risk?
    • Should the Gulf double down on hydrocarbons to fund diversification?
    • Is localisation strengthening the economy or making delivery harder?
    • Are Gulf countries building complementary economies or competing for the same customers?

    The session will also feature live audience polling and Q&A, giving attendees an opportunity to share their views.

    Hosted by: 

    Edward James, head of content and analysis at MEED

    A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today, he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemicals market. He is considered one of the world’s foremost experts on the Mena projects market. He is a regular guest commentator on Middle East issues for news channels such as the BBC, CNN and ABC News and is a regular speaker at events in the region. 

    Colin Foreman, editor of MEED 

    Colin Foreman is editor and a specialist construction journalist for news and analysis on MEED.com and the MEED Business Review magazine. He has been reporting on the region since 2003, specialising in the construction sector and its impact on the broader economy. He has reported exclusively on a wide range of projects across the region including Dubai Metro, the Burj Khalifa, Jeddah Airport, Doha Metro, Hamad International airport and Yas Island. Before joining MEED, Colin reported on the construction sector in Hong Kong.

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21380319/main.gif
    MEED Editorial
  • Syntys breaks ground on 20MW Qatar data centre

    13 November 2026

    Register for MEED’s 14-day trial access 

    Qatari data centre developer Syntys has broken ground on a 20MW facility to support hyperscale, cloud, artificial intelligence (AI) and advanced computing deployments.

    The groundbreaking ceremony took place on 12 November. It was attended by Qatar’s Communications & Information Technology Minister, Mohammed bin Ali bin Mohammed Al-Mannai, along with representatives from Ooredoo Group, Microsoft, Google, Kahramaa, the National Cyber Security Agency, Qatar Free Zones Authority and local banks.

    Syntys said the facility is being developed on an existing company campus, where power, fibre connectivity and an operational team are already in place. The company has yet to disclose the project value or planned completion date.

    The facility is designed to meet Tier 3 requirements and accommodate a range of rack densities, including higher-density configurations for graphics processing unit (GPU)-based AI and high-performance computing workloads.

    It will operate as a carrier-neutral facility, allowing customers to select connectivity providers and establish network resilience in line with their own technical and operational requirements.

    The project forms part of Syntys’ strategy to expand its Qatar platform through acquisitions and new development. Earlier this year, the company acquired QData QFZ, adding two operational, Tier 3-compliant, carrier-neutral facilities to its portfolio.

    Syntys now owns and operates four campuses in Qatar, allowing customers to establish primary and disaster-recovery environments at separate in-country locations.

    The company also designs and operates the facilities supporting Ooredoo’s sovereign AI cloud, which uses Nvidia Hopper GPUs.

    The development comes as Qatar implements its Digital Agenda 2030, which identifies digital infrastructure as one of six strategic pillars and targets about QR40bn ($11bn) in economic impact by 2030.

    The data centre is expected to support the growth of in-country digital services and enable sensitive workloads to remain within Qatar’s national borders.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21378257/main1028.png
    Yasir Iqbal
  • Jereh wins $392m Bu Hasa oil field facilities project

    13 November 2026

    Register for MEED’s 14-day trial access 

    The onshore oil and gas business of Abu Dhabi National Oil Company (Adnoc Onshore) has awarded China’s Jereh Group a contract valued at AED1.44bn ($392.1m) for the engineering, procurement and construction (EPC) of wellhead surface facilities and flowlines at the Bu Hasa cluster of oil fields in Abu Dhabi.

    The cluster includes the Bu Hasa, Bida Al-Qemzan and Huwaila fields. The objective of the project is to build wellhead surface facilities and lay gathering flowlines that will connect new wells to the existing production network.

    The scope of work on the project also covers the design, fabrication and installation of:

    • production well module skids
    • gas lift skids, which inject gas into wells to help lift the oil
    • skid-mounted wellhead control panels
    • solar power units

    The framework agreement awarded by Adnoc Onshore on a call-off basis has a duration of 36 months, with an extendable option of 24 months, Jereh said in a filing with China’s Shenzhen Stock Exchange, where it is listed.

    Adnoc Onshore is Adnoc Group’s largest production subsidiary, accounting for about 2 million barrels a day (b/d) of crude and about 7 billion cubic feet a day of associated gas from four primary onshore asset clusters: Bab, Bu Hasa, North East Bab and South East.

    Maintaining and enhancing oil output levels at the Bu Hasa asset is critical to Adnoc Onshore’s contribution to parent company Adnoc Group’s target of expanding crude oil production capacity to 5 million b/d by 2027, an initiative known as Accelerated Integrated Programme 5. The state energy company’s total production capacity currently stands at approximately 4.85 million b/d.

    Prior to this contract, Adnoc Onshore selected Jereh Oil & Gas Engineering Company in 2024 for a project to digitally connect 2,443 wells at the Bab, Bu Hasa and South East cluster of onshore oil fields in Abu Dhabi for remote operations. The contract, formally awarded in 2025, was valued at $920m.

    Abu Dhabi contracts

    The contract for the Bu Hasa wellhead facilities and flowlines is among a trio of projects totalling approximately $2.7bn that has been awarded by Adnoc Group in recent weeks, Jereh announced in its stock market filing.

    The largest of the three contracts, valued at $1.7bn, is for the Ruwais Diyab unconventional gas development in Abu Dhabi. Awarded to Jereh on a design, build and operate model, the contract has a duration of 29 months for construction works and 60 months of operations, with up to two five-year extensions available.

    Adnoc achieved final investment decision on the Ruwais Diyab unconventional gas development project on 2 November, during the Abu Dhabi International Petroleum Exhibition and Conference 2026.

    The project will deliver 345 million standard cubic feet a day (scf/d) of raw gas from 2029 over a 25-year period, with the potential to reach up to 1 billion scf/d in the future.

    The scope of work on the Ruwais Diyab project covers:

    • wellsite facilities
    • a central processing facility
    • gas gathering pipelines and product export pipelines
    • utilities

    The plant will treat the raw gas and recover the liquids produced with it. It will also treat produced water, which is the water that comes up from the wells with the gas, and recover sulphur. Finished products will be delivered to designated receiving facilities.

    When the operation period ends, Jereh will either hand the facilities over to Adnoc or decommission them and restore the site, as the contract and the owner require.

    The third contract covers Adnoc Onshore’s Bab and North East Bab 1 tie-in project, where the main scope of work involves tying in new oil producer wells and removing and modifying surface facilities at existing producer wells.

    The project’s scope also covers supporting works for water supply wells, water injection wells, disposal wells and water-alternating-gas injection wells. Several existing wells will also be upgraded with digital systems.

    Jereh said the value of its contract is $599m, with a duration of 60 months. Similar to the Bu Hasa project, this contract also uses a framework model wherein Adnoc Onshore will issue work orders in batches according to its execution plans.

    MEED previously reported that Adnoc Onshore had divided the scope of work on the Bab and North East Bab 1 tie-in project into 18 EPC packages. Along with Jereh, Adnoc Onshore has picked Abu Dhabi-based Robt Stone Middle East for a portion of work on the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21355151/main3320.jpg
    Indrajit Sen
  • PDO awards contract for Al-Ghubar oil field project

    12 November 2026

     

    Register for MEED’s 14-day trial access 

    Petroleum Development Oman (PDO) has awarded the main contract for a project to build a facility to handle additional oil production from the Al-Ghubar field in the sultanate.

    The Al-Ghubar field is located in the Ghaba Salt Basin at Qarn Alam, within majority state-owned PDO’s Block 6 concession area.

    The Al-Ghubar gas-oil gravity drainage (GOGD) facility will be designed as a sour (hydrogen sulphide) facility and is expected to handle a maximum oil production rate of 1,800 standard cubic metres a day (cm/d), a total water flow rate of up to 10,421 standard cm/d and gas lift of up to 256,934 standard cm/d. Production from the planned Al-Ghubar GOGD facility will be exported to PDO’s main oil line.

    China-based Jereh Group has won the contract for the Al-Ghubar GOGD facility project, sources told MEED.

    A project kick-off meeting between PDO and Jereh has also recently taken place, the sources said.

    MEED previously reported that Jereh had emerged as the lowest bidder for the project.

    The following contractors, among others, are understood to have been bidding for the Al-Ghubar GOGD facility project:

    • Engineering for the Petroleum & Process Industries (Egypt) / Petrojet (Egypt)
    • GS Engineering & Construction (South Korea)
    • Jereh (China)
    • Larsen & Toubro Energy Hydrocarbon (India)

    PDO floated the tender for the Al-Ghubar GOGD facility project in March, setting an initial bid submission deadline of 4 May, MEED previously reported.

    PDO later extended the deadlines for the submission of technical and commercial bids to 26 July and 7 August, respectively. Contractors submitted technical proposals by the revised deadline, according to sources.

    After receiving the technical bids for the project in July, PDO granted contractors until 16 August to submit commercial bids. It eventually extended the deadline to 1 September, with contractors submitting commercial proposals by that date, as MEED reported.

    The scope of work on the Al-Ghubar GOGD project covers the engineering, procurement and construction (EPC) of the following:

    • On-plot scope, consisting of:
      • Production separator  
      • Test separator  
      • Concentric wash tank
      • Wet oil pump
      • Water bath heater
      • Surge tank
      • Gas injection/gas lift compressor (centrifugal)
      • Utilities (instrument air compressors, chemical injection skids, drain system, vent system) 
      • Suction scrubber
      • Air coolers
      • Discharge scrubbers
      • Condensate flash drum
      • Atmospheric pressure knock-out drum 
      • Flare system
      • Gas heater
      • Water disposal pump
      • Oil shipping pump
      • 132kV substation and plant substation (housing 6.6kV and 415-Volt switchboard)
      • Control room
         
    • Off-plot scope consisting of:
      • Off-plot pipeline network (bulk header, test header, gathering infrastructure/ gathering line header, instrument air header, water disposal header)
      • Two remote manifold stations 
      • Tie-in connection to main oil line
      • Tie-in to gas network pipeline

    PDO previously intended to tender the Al-Ghubar GOGD project under its framework structure with selected EPC contractors, but ultimately tendered it separately.

    PDO is the operator of Oman’s Block 6 hydrocarbons concession, the sultanate’s largest and most prolific concession. Situated onshore and covering an area of 75,119 square kilometres, Block 6 contains 202 oil fields and 43 gas fields. PDO produces approximately 680,000 barrels a day of oil and condensates from the fields.

    The Omani government holds a 60% stake in PDO through Energy Development Oman. The other shareholders are UK-based Shell (34%), France’s TotalEnergies (4%) and Thailand’s state-owned PTTEP (2%).

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21345337/main2647.jpg
    Indrajit Sen
  • Laing O’Rourke joins the international exit list

    12 November 2026

    Commentary
    Colin Foreman
    Editor

    Register for MEED’s 14-day trial access 

    Laing O’Rourke’s decision to seek a buyer for its Middle East business marks the end of an era for UAE construction.

    In the early 2000s, the contractor was among the leading names in the market. Its work at Dubai International airport, the Atlantis hotel on the Palm Jumeirah and the ski slope at Mall of the Emirates made it arguably the UAE’s most prominent contractor during the pre-global financial crisis construction boom.

    Its activities were not limited to Dubai. A partnering agreement with Aldar for Al-Raha Beach then made it the most active contractor in Abu Dhabi almost overnight.

    The global financial crisis changed its fortunes. The Aldar Laing O’Rourke joint venture ended. Unsettled by payment problems and wider stress in the industry, the company took a more cautious approach to clients and projects in the region. One executive at the time told MEED: “You might see lots of tower cranes, but none of them are doing work that we would want to do.”

    The contractor’s appetite partially returned in the late 2010s, when it won Al-Wasl Plaza at the Expo 2020 site in Dubai. It also became a leading player in the growing data centre market, delivering facilities for repeat clients, including Khazna and Equinix.

    Data centres have since been its focus. These are significant projects, but they lack the public profile of the airport, Atlantis and Al-Wasl Plaza. As its profile faded, the company sold its UAE joinery arm to Dubai-based Arco Turnkey Solutions in 2025.

    Laing O’Rourke now looks set to follow other international contractors that have, for various reasons, left the region, including Murray & Roberts, Balfour Beatty, Multiplex, Carillion and Bam. With a record £17.2bn order book anchored by UK and Australian infrastructure, the group’s priorities clearly lie elsewhere.

    Whoever buys the business will inherit strong data centre credentials. For much of the market, however, Laing O’Rourke will be remembered for the landmark projects that defined the UAE’s boom years.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21344577/main.jpg
    Colin Foreman