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  Yahsat wins $5.7bn UAE contract

  22 September 2023

  Al-Yah Satellite Communications Company (Yahsat) has won an AED18.7bn ($5.1bn) contract for the provision of satellite capacity and services to the UAE government. 

  Its subsidiary, Yahsat Government Solutions, will implement the 17-year contract, which includes operations, maintenance and technology management services of ground segment satellite systems and terminals.

  The contract will replace two current agreements, the capacity services agreement and the managed services mandate, which end in November and December 2026, respectively.

  Under the new contract, Yahsat will provide the government with "secure and reliable satellite capacity and related managed services using the Al-Yah 1 and Al-Yah 2 satellites, currently in orbit, and supplement this with two new satellites, Al-Yah 4  and Al-Yah 5".

  It is expected that the Al-Yah 4 satellite will be launched in 2027, followed by Al-Yah 5 in 2028.

  Yahsat has been providing services to the UAE government for nearly two decades, since it first began operations.

  The contract increases Yahsat's contracted future revenues to AED25.7bn, 16 times its 2022 annual revenues, according to a company statement.

  It also extends backlog well beyond 2040, providing security and visibility over its future cash flows.

  In June, Yahsat signed an authorisation to proceed (ATP) with Airbus for the construction of Al-Yah 4 and Al-Yah 5.

  According to Yashsat, the ATP document "preserves the programme schedule and enables certain activities to commence, such as the system requirements review, design work and procurement activities for long-lead items".

  The Al-Yah 4 and Al-Yah 5 procurement, including spacecraft, ground segment infrastructure, launch and insurance, will be funded by Yahsat’s resources, in addition to other potential funding options that are currently under review.

  The award also includes an advance payment from the government of $1bn, to be received in 2024.

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  Main photo: Musabbeh al-Kaabi, chairman of Yahsat

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  Jennifer Aguinaldo
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  Riyadh builds the world’s largest urban park

  21 September 2023

  

   

  Tucked away from view behind site hoarding in the centre of Riyadh, work is progressing on a project that will transform the heart of the Saudi capital by creating the world’s largest urban park.

  The King Salman Park project will cover an area of 16.7 square kilometres, and more than 70 per cent of that space will be green areas.

  “The unique aspect of our project when you compare it to others is the amount of green space it will have,” says George Tanasijevich, CEO of King Salman Park Foundation.

  “Other projects will have hotel rooms and residential units, but none will have the amount of green space that King Salman Park will have. It will be substantial by global standards.”

  The scale of the project becomes apparent when considering public parks in other major cities. It is five times the area of New York’s Central Park, six times the size of London’s Hyde Park, and 16 times larger than Singapore’s Gardens by the Bay.

  The aim of King Salman Park is to give residents of Riyadh access to a world-class park on their doorstep – the park is connected to several main roads and linked to the Riyadh Metro and the city’s bus station.

  “People today have to travel to experience green spaces, so we are bringing something here that will allow them the convenience of being at home and experiencing the lifestyle benefits of green space,” says Tanasijevich.

  
  Land at the King Salman Park site has been contoured to create hills

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  While much of the focus of Saudi Arabia’s Vision 2030 is on economic transformation, it also includes targets aimed at improving the quality of life for people in the kingdom.

  “There is an economic aspect to what we are doing,” says Tanasijevich. “The primary highlight of our contribution [to Vision 2030] is more focused on lifestyle. It is not just being able to spend time in green spaces, but also all the sports facilities that will encourage younger people to become more interested in sports and athletics.”

  Project progress

  Launched in March 2019, there has been significant progress on the construction of the project. Much of the land has been shaped and contoured to create hills that will break up Riyadh’s typically flat topography.

  Work is also advancing on infrastructure and buildings, including the Royal Arts Complex and a visitor centre.

  “What we are trying to do is put together components that work together as a standalone project that are self-sustaining. We do not want people to visit and feel something is missing,” says Tanasijevich. 

  “We are going to have enough variety and elements in there that even when we open phase one, people are going to embrace it and find a multitude of ways to experience it.”

  As construction advances, the project took a major step forward on the first day of the Cityscape Global exhibition, which was held in Riyadh on 10-13 September. There, the King Salman Park Real Estate Development Fund was launched, with the aim of developing the first real estate investment plot within the site.

  The fund will bring in fresh financing for a SR4bn ($1.1bn) mixed-use project that will have more than 1,500 residential units together with offices, retail outlets, hotels, schools and other public amenities on a 290,000 square-metre site.

  Saudi Fransi Capital is the fund manager and King Salman Park Investment & Real Estate Development Company is the master developer. Naif al-Rajhi Investment Company is the real estate developer and master lessee of the entire project.

  Images: King Salman Park Foundation

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  Colin Foreman
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  Amaala multi-utilities contract is valued at $2bn

  21 September 2023

  The contract to develop and operate a multi-utilities infrastructure for the 4,155 square-kilometre Amaala tourism scheme on Saudi Arabia’s Red Sea coast is valued at $2bn, according to an industry source.

  Red Sea Global recently awarded the Amaala multi-utilities contract to a team comprising France’s EDF and UAE-based Abu Dhabi Future Energy Company (Masdar).

  The scope of the contract includes a 250MW solar power plant and 700 megawatt-hour battery energy storage system that will enable Amaala to be powered entirely by solar energy.

  The work scope includes a seawater reverse osmosis plant with a peak capacity of 37,000 cubic metres a day, as well as a sewage treatment plant. Both will be powered by renewable energy.

  MEED understands another French firm, Suez, will implement the water infrastructure component of the project.

  Red Sea Global and the developer team have yet to confirm the engineering, procurement and construction and battery energy storage contractors for the project.  

  Amaala issued the tender for the contract in October 2021. It will be developed using a public-private partnership model.

  In February 2022, Amaala appointed Austria-headquartered ILF Consulting Engineers as technical adviser for the multi-utilities project.

  Concession agreement

  The developer consortium will be responsible for the development; financing; engineering, procurement, construction and installation; testing and commissioning; insurance; ownership; operation and maintenance; and transfer of each of the infrastructure systems under a 25-year concession agreement.  

  Each infrastructure system will be transferred to Amaala at the end of the concession term.

  Owned by Saudi Arabia’s sovereign wealth vehicle, the Public Investment Fund, Amaala includes three communities – Triple Bay, the Coastal Development and the Island – each consisting of several residential, hospitality and retail components.

  Construction works on phase one of Triple Bay have started.

  The scheme is part of the Amaala Tourism Destination Development project.

  Amaala previously planned the project. In October 2022, Amaala merged with The Red Sea Development Company to form a new company called Red Sea Global, which is now implementing the project.

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  Jennifer Aguinaldo
• 
  Aramco extends Safaniya cogen bid deadline

  18 September 2023

  Saudi Aramco has extended by three months the tender closing date for a contract to develop a cogeneration independent steam and power plant (ISPP) project in Safaniya.

  It now expects to receive bids by December in lieu of the previous bid deadline of 17 September, according to a source close to the project.

  Aramco held a job explanation meeting and site visit for the Safaniya ISPP project in May.

  Aramco issued the tender for the contract for the planned cogeneration ISPP facility, which will cater to Aramco's Safaniya central processing facilities (CPF), in April.

  MEED understands that the electricity generated during the steam production will be supplied to the CPF and offshore oil and water injection facilities through a new 230-kilovolt gas insulation station.

  Under the current plan, the Safaniya CPF will provide fuel gas, desalinated water and steam condensate to the proposed cogeneration plant, treating the oily and process wastewater.

  The plant is expected to have a design capacity of between 500MPPH and 700MPPH steam and 300MW-400MW of power generation. It also entails the capacity expansion of a seawater reverse osmosis (SWRO) plant by 10,000 cubic metres a day (cm/d).

  Aramco expects to implement the cogeneration project on a build-own-operate-transfer (BOOT) basis.

  The plant is expected to be commissioned in 2027 and will remain in service as a capital lease for 25 years from the start-up date.

  It is understood bidders are required to provide committed funding for at least 50 per cent of the project's full senior debt requirement upon the tender closing date.

  The facility is envisaged as the primary power source for the Safaniya CPF.

  Japan’s Sumitomo Mitsui Banking Corporation (SMBC) and US-based White & Case are providing financial and legal advisory services to the project client. Germany's Fichtner is providing technical consultancy services.

  Ongoing cogen projects

  In July last, Korea Electric Power Corporation (Kepco) won the contract to develop Aramco’s Jafurah cogeneration ISPP project.

  The plant will have a power capacity of 270-320MW and a low-pressure (LP) steam demand of 77-166 thousand pounds an hour (klb/hr) and high-pressure (HP) steam demand of 29-126 klb/hour by 2023. The LP and HP steam demand will increase to 283-373 klb/hr and 66-321 klb/hr by 2027, respectively.

  Construction work is under way for Aramco’s Tanajib ISPP and desalination plant. Aramco selected a team comprising Japan’s Marubeni and the UAE-based Abu Dhabi National Energy Company (Taqa) to develop the project in 2020.

  On 19 April, Saudi Aramco Total Refining & Petrochemical Company (Satorp) received proposals for the contract to develop a cogeneration ISPP serving the Amiral petrochemicals project in Jubail.

  It is understood that Satorp has issued a conditional award letter to the preferred bidder for the contract, a team comprising Japan's Jera and the UAE's Abu Dhabi National Energy Company (Taqa).

  The facility is expected to have a power generation capacity of 470MW.

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  Jennifer Aguinaldo
• 
  Saudi Arabia looks both east and west

  15 September 2023

  MEED's October 2023 special report on Saudi Arabia also includes: 

  > Gigaproject activity enters full swing
  > Infrastructure projects support Riyadh’s logistics ambitions
  > Aramco focuses on upstream capacity building
  > Saudi chemical and downstream projects in motion
  > Riyadh rides power projects surge
  > Saudi banks track more modest growth path
  > Jeddah developer restarts world’s tallest tower

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  Saudi Crown Prince Mohammed bin Salman al-Saud has been enjoying the international limelight of late, with a trip to India to take part in the G20 summit on 9 and 10 September. There, he met a succession of international leaders, including India’s Prime Minister Narendra Modi, Brazilian President Luiz Inacio Lula da Silva and Turkey’s President Recep Tayyip Erdogan.

  A few days earlier, he had announced the launch of a new international body, the Global Water Organisation. Details of its purpose and funding remain limited for now, but it will have its headquarters in Riyadh and is expected to lead international efforts to better manage the world’s water resources.

  All this activity is a sign that MBS remains intent on changing Saudi Arabia’s position in the world order – also evident in its decision in March to join the China-dominated Shanghai Cooperation Organisation (SCO) as a dialogue partner.

  That was followed on 24 August by an invitation to join the Brics group, along with the UAE, Iran and three other countries.

  Saudi is engaged in extreme hedging … I think Riyadh has suggested reluctance to join Brics just to buy time and signal to Western partners that it is not too eager to join. But I believe Riyadh has long made that call
  Cinzia Bianco, European Council on Foreign Relations

  Weighing the options

  Yet Riyadh also appears keenly aware of the potential pitfalls as it tries to carve out a different role for itself. That was clearly seen in its ambiguous reaction to the Brics invitation, with Foreign Affairs Minister Prince Faisal bin Farhan saying it wanted to find out “further details on membership requirements” before committing to join.

  Analysts saw those comments as an attempt to placate those in Western capitals concerned about China's growing influence in the Gulf region, and in the UAE and Saudi Arabia in particular.

  “I think Faisal bin Farhan’s statement was one of trying to balance expectations and signal to the Biden administration that the Saudis are not definitively taking sides, but rather are seeking to maximise their own leverage in multiple relationships that they see as not mutually exclusive,” says Kristian Coates Ulrichsen, fellow for the Middle East at Rice University’s Baker Institute for Public Policy.

  “There is a feeling in the Biden administration that, under Mohammed bin Zayed, the UAE has made a choice to go its own way and do its own thing, but that with Saudi Arabia, there is still a chance to offer Mohammed bin Salman a package that can outdo anything China can come up with.”

  Such considerations are nevertheless likely to delay rather than prevent Riyadh from taking up the offer to join Brics or deepen its involvement with the SCO.

  There are good reasons for moving with some caution, though. Recent UK media reports have suggested that Saudi Arabia is lobbying to join a project by the UK, Italy and Japan to develop a next-generation fighter jet – something that would give it access to technology that would be hard or impossible to replicate from other, non-Western sources.

  The issue will likely be on the agenda if and when Mohammed bin Salman travels to London in the coming months – a visit that has been suggested but is unconfirmed at the time of writing. Such visits remain controversial in Western capitals, where the diplomatic concerns that emerged over relations with Saudi Arabia in 2018 are far from resolved.

  “Saudi is engaged in extreme hedging,” says Cinzia Bianco, visiting fellow at the European Council on Foreign Relations.

  “Indeed, I think Riyadh has suggested reluctance to join Brics just to buy time and signal to Western partners that it is not too eager to join. But I believe Riyadh has long made that call and will join Brics, as well as the SCO.

  “I am not entirely sure what MBS can achieve in London. I know that they want in on the Tempest fighter jet and to sign a bilateral free trade agreement with the UK, but on both questions, there are substantial political obstacles.”

  The challenge is that, as 2030 nears, so much of Mohammed bin Salman’s credibility has been vested in that year that officials will feel under intense pressure to deliver results, however they achieve them
  Kristian Coates Ulrichsen, Rice University’s Baker Institute for Public Policy

  Domestic performance

  On the domestic front, there are other, broader considerations for Mohammed bin Salman.

  As was the case with the launch of the new Global Water Organisation, he often attaches himself closely to new initiatives – something also seen in Riyadh’s bid to host the Expo 2030 trade fair and the broader Vision 2030 strategy to remodel the economy. However, this creates risks if the new projects fail to create the stir that officials hope.

  “There’s no doubt that the Saudi crown prince has wagered a substantial degree of financial and political capital as part of his transformation agenda for the country,” says Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington.

  On the other hand, it might be that there is so much change under way that all the other activity overshadows any failures.

  “Somewhat counterintuitively, the massive scale and scope of new investments and initiatives make it harder to point at any one specific area of underperformance as a reflection of the broader transformation process,” adds Mogielnicki.

  At the same time, the whole apparatus of the Saudi state will be working hard to ensure that the crown prince’s ambitions are as close to being realised as possible.

  “I agree that MBS risks running up reputational problems in the next few years, especially if 2030 nears and some of the gigaprojects show signs of lagging behind with little discernible development,” says Ulrichsen.

  “The challenge is that, as 2030 nears, so much of Mohammed bin Salman’s credibility has been vested in that year that officials will feel under intense pressure to deliver results, however they achieve them.”

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  Image: New Delhi, 11 September 2023 – Saudi Crown Prince Mohammed bin Salman meets India's President Droupadi Murmu at the Presidential Palace (Rashtrapati Bhavan). Credit: Saudi Press Agency

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  Dominic Dudley