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  Read the December 2024 MEED Business Review

  4 December 2024

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  Regional integration is crucial to the GCC’s ongoing economic success story.

  After signing the Al-Ula Accords in January 2021, there has been a renewed sense of togetherness across the GCC that has manifested itself in several important ways.

  The December 2024 issue of MEED Business Review examines how close collaboration between the GCC states is driving regional growth and attracting investment.

  In 2024, the six GCC states have enjoyed warm relations, and tensions with Iran have cooled following a series of diplomatic rapprochements involving Tehran, Riyadh and Abu Dhabi. 

  These diplomatic efforts have resulted in a more stable business environment that has produced robust economic growth, record levels of inward investment and record spending on projects.

  At the same time, transport projects, including the GCC railway, causeways and road links, are being driven forwards to connect the GCC states. Once built, these schemes should provide a catalyst for further economic activity. Read more about the transport links that are stitching the GCC together here. 

  The December issue also includes our annual engineering, procurement and construction (EPC) contractor ranking. 

  The past four quarters have seen the award of an unprecedented value of oil, gas and chemicals projects in the Middle East and North Africa. Between Q4 2023 and Q3 2024, the combined value of regional schemes reached $94bn, soaring above the already elevated $67bn of awards in the previous four quarters.

  The surge in contract awards over the past two years is a boon for the EPC sector, with Italian firms emerging as the top EPC contract winners.

  This month’s exclusive 15-page market report focuses on Bahrain, where the projects sector is dragging on the economy. MEED’s analysis finds that Manama must course correct after seven straight years of project sector value contraction. 

  Meanwhile, in this month’s issue, the team assesses the potential impact of the joint resolution issued by Arab and Islamic leaders from across the Middle East and North Africa region when they gathered in Riyadh on 11 November, calling for a ceasefire to end the expanding regional conflict centred on Israeli actions in Gaza and Lebanon.

  We also examine Kuwait’s hopes that newly appointed Oil Minister Tariq Suleiman Al-Roumi can push forward key hydrocarbons projects after years of stalled progress, look at how the award of high-profile construction contracts and financial support from the Saudi government have helped Jeddah-based Saudi Binladin Group (SBG) to make a comeback in 2024, and learn why international arbitration is becoming the mechanism of choice for resolving legal disputes arising in the energy sector amid escalating geopolitical tensions.

  The December issue is also packed with exclusive interviews. Gregory Jasmin, Khazna Data Centres’ senior director of business development strategy, tells MEED about the firm’s plans to build more 100MW-scale data centres; Mohammad Abdelqader El-Ramahi, chief green hydrogen officer at Abu Dhabi Future Energy Company (Masdar), discusses Abu Dhabi's low-carbon hydrogen agenda; and Sener’s Middle East managing director, Mario Neves, details the Spanish engineering company’s plans for the Middle East region.

  We hope our valued subscribers enjoy the December 2024 issue of MEED Business Review. 

  

   

  Must-read sections in the December 2024 issue of MEED Business Review include:

  > AGENDA: 
  > Cooperation strengthens Gulf markets
  > Transport links stitch GCC together

  > CURRENT AFFAIRS:
  > Arab-Islamic summit demands Gaza ceasefire
  > Kuwait hopes new oil minister can push projects forward

  INDUSTRY REPORT: MEED's 2024 ranking of regional EPC contractors > Italian firms are top EPC contract winners > Contractors battle chronic problems

  > CONSTRUCTION: Saudi Binladin Group makes a comeback

  > DATA CENTRES: Khazna expects to build more 100MW-scale data centres

  > GREEN HYDROGEN: Abu Dhabi bullish on green hydrogen

  > INTERVIEW: Sener eyes role in evolving Middle East infrastructure

  > LEGAL: Navigating energy disputes through international arbitration

  > BAHRAIN MARKET REPORT: 
  > COMMENT: Bahrain’s projects sector drags on economy
  > GOVERNMENT & ECONOMY: Bahrain’s economic growth momentum falters
  > BANKING: Bahrain banking works to scale up
  > OIL & GAS: Bapco Energies sets sights on clean energy goals
  > POWER & WATER: Manama jumpstarts utility sector
  ​​​​> CONSTRUCTION: Bahrain construction struggles to keep pace
  > INDUSTRY: Alba positions for the future

  > MEED COMMENTS: 
  > Riyadh may turn to different CEOs to run its projects
  > Warming Riyadh-Tehran ties herald regional shift
  > Decarbonising steel is hard to resist
  > Saudi Arabia power sector unlikely to disappoint

  > GULF PROJECTS INDEX: Gulf projects market returns to strong growth

  > OCTOBER 2024 CONTRACTS: Region sets stage to break records this year

  > ECONOMIC DATA: Data drives regional projects

  > OPINION: Middle East faces a reckoning

  > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

  To see previous issues of MEED Business Review, please click here

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  MEED Editorial
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  Aramco housing PPP reaches financial close

  4 December 2024

  

   

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  A team led by Saudi-headquartered Lamar Holding has reached financial close on the project to develop Saudi Aramco’s staff accommodation on Saudi Arabia’s Abu Ali Island, according to sources close to the project.

  The Abu Ali Services Residential Compound public-private partnership (PPP) project is expected to house 500 employees across 260,000 square metres of land.

  The contract, which comprises six residential buildings with support facilities, is estimated to be worth SR860m ($229m).

  One of the sources said the local Riyad Bank agreed to provide long-term debt to the project.

  Debt will account for roughly 80% of the project cost, with the rest accounted for by equity. 

  The project is scheduled for completion within 28 months.

  US/India-based Synergy Consulting provided financial advisory services to the developer team.

  Aramco awarded the contract to develop the Abu Ali housing PPP in early 2023.

  The winning consortium contains the local Arabian Castles for General Contracting as the operation and management contractor and China’s Sepco as the engineering, procurement and construction (EPC) contractor. 

  Aramco has so far awarded two other housing PPP projects.

  In December 2022, a team comprising Lamar Holding and Asyad Group won the contract to develop PPP accommodation complexes at Haradh and Wudayhi in the Eastern Province of Saudi Arabia.

  The contract is valued at $450m. The project reached financial close in July this year.

  The complexes are expected to house up to 2,800 workers across 11 residential buildings, with two mosques and a clinic, as well as a refurbished recreational facility and an expanded medical facility at each complex.

  The scope of the contract also includes the construction of a sewage treatment plant operations building and the installation of chiller plants, according to regional projects tracker MEED Projects.

  A team led by El-Seif Engineering & Contracting was awarded the contract to develop and implement the Tanajib housing PPP project in early 2022. The project scope includes the development of 2,500 housing units, in addition to a food court, parking facilities and infrastructure.

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  Jennifer Aguinaldo
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  Saudi Arabia awards Rabigh 2 solar contract

  4 December 2024

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  A team comprising the local AlJomaih Energy & Water and France’s TotalEnergies Renewables has signed the power-purchase agreement (PPA) with Saudi Power Procurement Company (SPPC) for the 300MW Rabigh 2 solar independent power project (IPP) in Saudi Arabia.

  The Rabigh 2 IPP is one of four solar IPPs procured under round five of the kingdom’s National Renewable Energy Programme (NREP). 

  The signing of the PPA coincided with the visit of French President Emmanuel Macron to Riyadh on 3 December.

  The local/French team proposed developing the project at a levelised electricity cost of  $c1.78 a kilowatt-hour (kWh).

  It saw off competition from the second-lowest bidder, a team of the UAE’s Abu Dhabi Future Energy Company (Masdar), South Korea’s Korea Electric Power Corporation (Kepco) and the local Nesma Renewables, which offered $c1.89/kWh.

  Other schemes under the NREP round five are the 2,000MW Al-Sadawi solar IPP, the 1,000MW Al-Masaa solar IPP and the 400MW Hinakiyah 2 solar IPP.

  A developer team that includes Masdar, Kepco and China’s GD Power Development submitted a levelised cost of electricity of hals 4.847 ($c1.29) a kilowatt-hour (kWh) for the contract to develop the Al-Sadawi solar scheme.

  SPPC signed the PPA for the Al-Sadawi solar IPP, which is located in the Eastern Province, on 18 November. 

  SPPC received six proposals from companies for the contracts to develop and operate four solar photovoltaic (PV) IPP projects in Saudi Arabia in August.

  According to SPPC, the lowest and second-lowest bidders in the remaining schemes under round five of the NREP are:

  Al-Masaa solar IPP (Hail): 1,000MW

  • L1: SPIC/EDF Renewables (France): $c1.36/kWh
  • L2: AlJomaih Energy & Water (local) / TotalEnergies Renewables (France): $c1.40/kWh

  Al-Hinakiyah 2 solar IPP (Medina): 400MW

  • L1: SPIC/EDF: $c1.51/kWh
  • L2: Masdar/Kepco/Nesma:  $c1.57/kWh

  US/India-based Synergy Consulting is providing financial advisory services to SPPC for the NREP fifth-round tender. Germany’s Fichtner Consulting is providing technical consultancy services.

  The round five solar PV IPPs take the total capacity of publicly tendered renewable energy projects in Saudi Arabia to over 10,300MW. Solar PV IPPs account for 79%, or about 8,100MW, of the total capacity.

  Four wind IPPs, one of which has yet to be awarded, account for the remaining capacity.

  SPPC recently prequalified companies that can bid for the contracts to develop wind and solar schemes under the sixth round of the NREP.

  SPPC is procuring 30% of the kingdom’s target renewable energy by 2030. Saudi sovereign wealth vehicle the Public Investment Fund (PIF) is procuring the rest through the Price Discovery Scheme. The PIF has appointed Acwa Power, which it partly owns, as principal partner for these projects.

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  Jennifer Aguinaldo
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  Work on OQ’s gas project in Sur to complete next year

  4 December 2024

  

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  Engineering, procurement and construction (EPC) works on Omani state energy conglomerate OQ’s project to increase gas processing and transport capacity in the Sur area are expected to be completed within the first quarter of next year.

  The main contractor for the OQ central rich and lean gas segregation project is Oman-based Galfar Engineering & Contracting.

  OQ awarded Galfar the contract for the project, estimated to be valued at $170m, in the third quarter of 2021.

  Local firm Muscat Engineering Consultancy has performed the project’s front-end engineering and design works.

  The project’s basic scope of work involves dedicating the main 48-inch pipeline between the Saih Rawl central processing plant (SRCPP) and Sur. This pipeline transports rich gas from Petroleum Development Oman’s Saih Nihayda gas processing plant (SNGP) and the SRCPP to feed consumers such as Oman LNG.

  The scope of work also involves dedicating the existing 48-inch loop line from SNGP, and building a new 48-inch pipeline – covering 65 kilometres – to Oman LNG in Sur for lean gas for supply to non-LNG consumers, such as Omifco, Sur IPP, Al-Kamil IPP and the Sur Light Industrial Area.

  Work on the project also covers gas quality blending at GNH, where the two 48-inch pipelines will meet, combining the lean and rich gas pipelines at the new Sur GSS and sending the mixed gas, using a new launcher, to the existing Oman LNG receiver.

  Galfar has further sub-contracted part of the pipeline construction, welding and installation works to local firm Flowtech United.

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  Indrajit Sen
• 
  Abu Dhabi moves ahead with AI power plants

  4 December 2024

  

   

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  Abu Dhabi state utility and offtaker Emirates Water & Electricity Company (Ewec) is understood to be working with Abu Dhabi National Energy Company (Taqa) and Abu Dhabi Future Energy Company (Masdar) to implement the power plant projects that support the UAE capital’s artificial intelligence (AI) strategy.

  According to an industry source, the planned open-cycle gas turbine (OCGT) power generation plant project in Abu Dhabi’s Al-Dhafra region, which Taqa is procuring on a fast-track basis, is designed to provide backup power to the round-the-clock (RTC) solar independent power project (IPP) that Masdar is developing.

  MEED previously reported that Taqa was evaluating the proposals it received for a contract to build the Al-Dhafra OCGT plant, which is expected to have an installed capacity of between 1,000MW and 1,100MW.

  Taqa received engineering, procurement and construction (EPC) proposals for the contract in late September.

  Related read: Region plays high-stakes AI game

  Separately, Masdar is procuring a solar IPP to provide RTC power during the summer months.

  The solar IPP capacity being considered is about 5,000MW, and the battery energy storage system (bess) is approximately 20 gigawatt-hours. This would enable approximately 1,000MW of RTC or 24×7 power between April and October of every year, industry sources tell MEED.

  One of the sources said these fast-track projects comprise the AI strategy’s first phase, with Ewec planning to publicly tender the succeeding phase or phases of the project.

  The UAE National Artificial Intelligence Strategy 2031 has set eight strategic objectives, including building a reputation as an AI destination, deploying AI in priority sectors, attracting AI talent and ensuring strong governance and effective regulation.

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  Jennifer Aguinaldo