Saudi boom propels GCC market to near decade high
17 July 2023
The GCC projects market has recorded its best performance in nearly a decade during the first half of this year.
According to regional projects tracker MEED Projects, there were $83bn of contract awards from 1 January to 30 June, the best total for the first six months of a year since 2015. The $83bn total is also a significant increase on the $47bn of contract awards recorded during the first half of 2022.
The strong performance during the first half should continue for the rest of the year. Extrapolating from the total value of awards this year, the 2023 total could be the best since 2015. That year, there were $170bn of contract awards, just under the total of $174bn recorded in 2014.
Saudi Arabia was the most active country for contract awards. During the first six months of the year, there were $42bn of deals signed in the kingdom, the most on record. The previous high was the $28bn awarded during the first half of 2014.
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The second-most active market was the UAE, with $22bn of awards. While this total represents a strong rebound from the Covid-19 pandemic-related lows of 2020, it is still significantly lower than the $28bn awarded during the first half of 2014.
Qatar LNG
The largest contract award by value this year was the $10bn contract secured in Qatar by a joint venture of France’s Technip Energies and Lebanon’s Consolidated Contractors Company (CCC) for the construction of two liquefied natural gas (LNG) trains for the North Field South Development for Qatargas.
The second-largest contract award was the estimated $3.1bn contract secured by Dubai-based Alec for the contract to build the Wynn Resort in the UAE emirate of Ras al-Khaimah.
Qatar was also home to the third-largest contract award this year, with US-based Chevron Phillips Chemical and Qatar Energy awarding a joint venture of South Korea’s Samsung Engineering and Taiwan’s CTCI Corporation the estimated $2.8bn contract for the construction of an ethane cracker at Ras Laffan.
The major contract awards in Qatar masked a lack of activity elsewhere. According to regional projects tracker MEED Projects, there were 13 contract awards in the country during the first half of the year. The low number, combined with the major contract awards in Ras Laffan, meant that the average value of contract awards in Qatar was $1.1bn. The average value of contract awards in Saudi Arabia, meanwhile, was $219m and in the UAE, it was $114m.
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