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• 
  Saudi Arabia accelerates its rail revolution

  4 December 2025

  Saudi Arabia stands at a pivotal moment. Its population – around 35 million and rising – is overwhelmingly young and increasingly urban. Major cities like Riyadh – approaching 8 million residents – and Jeddah are experiencing rapid growth in population and activity, increasing demand for efficient mobility solutions. After decades of car-focused development, there now exists an opportunity to introduce new modern multimodal transport solutions in line with the objectives of Vision 2030. 

  Rail offers an answer to urban and economic pressures. Each train can remove hundreds of cars from the roads, cutting congestion and commuting times. Rail also aligns with Saudi Arabia’s environmental commitments. 

  Efficient mobility is key to Riyadh’s ambition to rank among the world’s top city economies. A reliable metro bolsters productivity as workers spend less time in traffic, boosts retail and tourism, with easier access to malls and attractions, and increases real estate values around stations. It also expands access to opportunity by providing safe and convenient transportation for women and youth entering the workforce. Similarly, intercity rail links can unite labour markets and connect people to jobs and services across the region. 

  Rail development is also central to Saudi Arabia’s strategy to become a global logistics and tourism hub. Launched in 2021 as part of Vision 2030, the National Transport and Logistics Strategy (NTLS) explicitly prioritises expanding the rail network to connect key cities, ports and economic zones. The kingdom aims to roughly double its rail network, adding more than 5,000 kilometres of new tracks. Saudi Arabia can unlock economic potential in underdeveloped regions, facilitate domestic tourism (e.g. convenient travel to cultural and religious sites) and streamline freight movement. 

  An integrated rail system also enhances resilience by providing alternative transport modes to complement roads and aviation, making the overall economy more robust against shocks such as oil price fluctuations or air travel disruptions.

  The time is ripe for rail – it addresses urgent urban challenges and propels the kingdom towards its Vision 2030 objectives of sustainability, connectivity and diversified growth

  Current and planned projects

  Public transportation in Saudi cities is targeted to rise from 1% to 15% by 2030. Major investments are already under way or planned across both passenger and freight rail:

  Riyadh Metro: A flagship $22.5bn project, the new six-line Riyadh Metro network (176km, 85 stations) is set to carry more than a million passengers daily and reduce traffic volumes by an estimated 30%.

  Haramain High-Speed Railway: Completed in 2018, this 450km electric high-speed line connects the holy cities of Mecca and Medina via Jeddah at speeds up to 300km/h. The Haramain line, with a capacity of 60 million passengers a year, has already transported more than 20 million travelers – dramatically cutting travel times for pilgrims and residents while offering a comfortable, climate-friendly alternative to highway driving. 

  Saudi Landbridge Project: The Landbridge is a planned 1,300km railway linking the Red Sea coast to the Arabian Gulf. This new line will connect Jeddah’s port with Riyadh and onward to Dammam on the Gulf, including a spur to the industrial city of Jubail. By creating the first direct east-west rail corridor across Saudi Arabia, the Landbridge will revolutionise freight logistics. Transport times for containers and goods will shrink from days by truck or ship to mere hours by rail, slashing logistics costs. The Landbridge will also carry passengers, enabling fast travel between major cities. 

  GCC Regional Rail Connectivity: This 2,100+km network – slated for completion around 2030 – will tie together all six GCC states. Key corridors for Saudi Arabia include a line north to Kuwait City-Riyadh, and another south linking Riyadh with Doha, Qatar (via the Saudi-Qatar border at Salwa). There is also a planned connection from Dammam eastward via a new causeway to Bahrain. Saudi Arabia, by virtue of its geography, will host the largest share of the GCC rail route, effectively becoming the backbone of Gulf connectivity. 

  Q-Express to Qiddiya: Qiddiya, an upcoming entertainment city west of Riyadh and one of the Vision 2030 gigaprojects, will be connected to Riyadh’s King Khalid International airport by a high-speed rail line. Planners envision using cutting-edge technology such as magnetic-levitation (maglev) trains to whisk visitors from the airport to Qiddiya in record time. This roughly 40km connection, being structured as a public-private partnership (PPP), will enhance Qiddiya’s accessibility for international tourists and Riyadh residents, while showcasing futuristic transit tech. The Q-Express is part of a broader strategy to integrate new economic cities, such as Qiddiya, Neom and others, into the national transport grid from the outset, ensuring these developments are well-connected and sustainable.

  Financing Rail Projects in Saudi Arabia

  Given the Vision 2030 emphasis on private sector participation, Saudi Arabia has a diverse range of financing tools for its rail programme:

  PPPs: In a PPP, private consortiums can design, build, finance and often operate infrastructure, sharing risks and rewards with the public sector. Saudi authorities see PPPs as a way to deliver projects efficiently while conserving public capital for other priorities. The Riyadh Metro, while government-funded during construction, will involve private operators for its operations and maintenance contracts. More directly, the upcoming Qiddiya rail link is planned as a PPP concession, with international firms invited to invest and bring innovative technology. The long-delayed Landbridge project, after earlier attempts, is now also expected to be executed via a PPP/BOT (build-operate-transfer) structure, overseen by Saudi Railway Company (SAR) and the Public Investment Fund (PIF). 

  Islamic Finance: Saudi Arabia’s leadership in Islamic finance makes sharia-compliant funding mechanisms a natural fit for its rail investments. Project sponsors and government-related entities have the option to issue sukuk (Islamic bonds) or use Islamic project finance structures to fund rail construction. These instruments attract capital from local and regional banks and funds that prefer sharia-compliant assets. For example, the PIF has raised billions through sukuk to support infrastructure development. Rail projects – which generate steady long-term cash flows and tangible assets – are well-suited to Islamic finance principles like asset-backing and profit-sharing. This approach also resonates with the cultural and religious context, making public support for these projects even stronger.

  Sustainable Finance: Saudi Arabia is turning to sustainable finance to fund rail and transit as sustainability becomes a global investment theme. Green bonds and loans fund environmental projects and rail qualifies by cutting emissions. Through their green bond frameworks, the government and PIF have issued multibillion-dollars bonds that include clean transport. By identifying projects aiming to improve environmental outcomes, Saudi Arabia can tap into the growing pool of internal ESG-focused investors who are eager to finance low-carbon infrastructure.  This can potentially lower borrowing costs and enhance the kingdom’s image as a sustainable development champion.  Additionally, global development banks and export credit agencies have shown interest in supporting Gulf rail projects on climate grounds. For instance, a significant portion of the Riyadh Metro’s rolling stock and systems was financed via export credits, and future rail lines could attract sustainable development loans.

  Transforming transport

  The time is ripe for rail – it addresses urgent urban challenges and propels the kingdom toward its Vision 2030 objectives of sustainability, connectivity and diversified growth. As of October 2025, Saudi Arabia’s rail sector has a clear baseline: strong urban demand and Vision 2030 policy direction; a proven Haramain high-speed corridor; the six-line Riyadh Metro; and a pipeline centered on the Landbridge, GCC links and connectors such as the Q-Express. The kingdom has set targets to raise public transport’s share from 1% to 15% by 2030 and plans to add more than 8,000km of track under the NTLS. Financing pathways are established with early application on major assets. Together, these facts define the current state and provide a benchmark against which delivery, ridership, emissions and broader economic outcomes can be measured as projects move from plan to operation.

  

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• 
  Momentum builds in Oman construction

  3 December 2025

  

   

  The Omani construction and infrastructure projects market has maintained its momentum this year, with more than $3.3bn-worth of contracts awarded by late November.

  The outlook for the remainder of the year is promising, supported by a further $1bn-worth of schemes expected to be awarded before year-end.

  If achieved, this would mark the second consecutive year in which the market has exceeded $4bn in awards since 2015, continuing the steady growth Oman has experienced since emerging from the Covid-19 pandemic in 2021 and following the leadership transition in 2020, when Sultan Haitham Bin Tariq Al-Said succeeded Sultan Qaboos Bin Said.

  Transport contracts

  A major milestone for Oman’s construction sector came in May, when three contracts worth over RO258m ($670m) were awarded for packages three, four and five of the Adam-Thumrait Road dualisation project.

  The contracts were awarded to joint ventures comprising local and Saudi-based firms.

  In November, the Ministry of Transport, Communications & Information Technology awarded a $117m contract to the local subsidiary of Austria’s Strabag for the construction of Al-Mouj Road and its connection to 18 November Street in Muscat.

  Several major road projects are expected to be awarded imminently as tendering progresses. In October, 13 firms submitted bids for the design-and-build contract for a dual-carriageway in Sohar in North Al-Batinah Governorate.

  A contract award is also expected soon for the remaining works on parts one and three-A of the Adam-Thumrait dualisation project, for which local contractor Al-Hashemi Al-Rawas Trading & Contracting submitted the lowest bid of $116.5m in September.

  Airport development is also moving forward. In July, the Civil Aviation Authority (CAA) prequalified 20 local and international firms for a tender covering enabling works at Musandam airport.

  The CAA also tendered engineering and design contracts for the Jabal Akhdar, Masirah and Sohar airports.

  These projects fall under the National Aviation Strategy 2030, which aims to attract $3.6bn of investment in airport cities over the next two decades.

  According to MEED Projects, Oman has a pipeline of more than $20bn-worth of infrastructure schemes, the largest of which is the Muscat Metro.

  In November, it was reported that studies for the proposed Muscat Metro scheme had been completed. The scheme is expected to span 55 kilometres with 36 stations and cost around RO1bn ($2.6bn).

  Real estate

  Real estate development is also gaining pace, with several masterplanned projects advancing. Since assuming leadership, Sultan Haitham has pushed forward a number of major schemes.

  Among them is the New Smart City Salalah development, a 7.3-square-kilometre project on Oman’s southern coast. In October, 20 local and international engineering firms expressed interest in bidding for the detailed design contract.

  Progress is also evident on Sultan Haitham City, the most high-profile masterplanned development in the sultanate, overseen by the Ministry of Housing & Urban Planning (MHUP).

  Since last year, the ministry has signed multiple agreements for infrastructure works, including roads, electricity, water, sewage, irrigation, telecommunications and district cooling networks.

  Tendering has also resumed on the Grand Blue City project, also known as Al-Madina Al-Zarqa, located along the Al-Sawadi seafront about 100km northwest of Muscat. Originally launched in 2005, the scheme stalled during the global financial crisis.

  Preparatory works are now expected to begin soon for phase one, which includes 100 luxury villas, 202 lagoon villas, a five-star hotel, 130 serviced apartments (from studios to three-bedroom units) and 270 residential apartments.

  Another major development near the capital is Al-Khuwair Downtown, close to Muscat International airport and also led by MHUP. The contract for the marina infrastructure package is expected to be awarded soon following bid submissions in August.

  MHUP is also progressing the Omani Mountain Destination at Jabal Al-Akhdar, located 150km from Muscat. The $2.4bn project includes 2,537 housing units, 2,000 hotel rooms and a health and wellness village at an altitude of 2,400 metres.

  Other major upcoming MHUP-led schemes include Al-Thuraya City in Muscat and the Khor Grama project in Sur in the Ash Sharqiyah South Governorate.

  Investment avenues

  Foreign investors are playing a role. Egyptian developer Talaat Moustafa Group Holding (TMG) recently announced RO1.5bn ($4bn) of investment across two real estate projects in Muscat.

  Public-private partnerships (PPPs) are also supporting growth. In November, Oman tendered three key road schemes on a PPP basis: the Salalah-Thamrait road, the Muscat-Al-Dakhiliyah road (Al-Maabela–Thumayd section) and the Bausher-Al-Amerat tunnel road, alongside the Al-Amerat-Dima Wattayeen road.

  All these subsectors are expected to generate opportunities for construction companies over the coming years. The market also has the potential to grow far beyond its achievements last year. While that growth was positive, analysis of the historical numbers shows that the Oman market can achieve much more. In 2014, when the market peaked, there were over $9bn of awards – more than double the last year’s total. 

   

   

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  Yasir Iqbal
• 
  LNG goals galvanise Oman’s oil and gas sector

  3 December 2025

  

   

  The Omani oil and gas sector, where large-scale, capital-intensive project investments are relatively rare, has been bolstered by progress on two major liquefied natural gas (LNG) developments.

  The government made headlines in July last year when it announced that majority state-owned Oman LNG would build a fourth train at its Qalhat LNG production complex in Sur.

  The new LNG train will have an output capacity of 3.8 million tonnes a year (t/y), increasing Oman LNG’s total capacity to 15.2 million t/y when it is commissioned in 2029.

  Oman LNG has recently made key progress on the expansion project, having shortlisted three bidders for the main engineering, procurement and construction (EPC) contract: a consortium of Chiyoda and South Korea’s Samsung C&T; Japanese contractor JGC Corporation; and a consortium comprising Italy’s Saipem and South Korea’s Daewoo Engineering & Construction.

  Technical and commercial bids are due in February and March 2026, respectively. The EPC tender process began less than a year after Oman LNG awarded the front-end engineering and design (feed) contract to US-based consultancy KBR.

  Separately, France’s TotalEnergies is studying a potential expansion of its Marsa LNG bunkering and export terminal in Oman. The move is significant, given that the first phase of the project is currently under construction in the sultanate’s northern industrial city of Sohar and will have an output capacity of 1 million t/y.

  TotalEnergies reportedly began an initial study on a potential second phase earlier this year. The French energy major may consider doubling the LNG complex’s capacity, although the plan has yet to be confirmed, according to sources.

  Earlier in the year, TotalEnergies appointed Technip Energies – already the main EPC contractor on the under-construction Marsa LNG terminal – to perform concept and feasibility studies on the proposed expansion phase.

  With Oman LNG advancing its fourth train and TotalEnergies assessing a potential doubling of LNG output, the sultanate is positioning itself to become a major global LNG player by 2030.

  Upstream pursuits

  Petroleum Development Oman (PDO), meanwhile, continues to advance projects aimed at maintaining and enhancing the sultanate’s oil and gas production capacity.

  PDO operates Block 6, Oman’s largest and most prolific hydrocarbons concession, spanning 75,119 square kilometres onshore and containing 202 oil fields and 43 gas fields.

  The government holds a 60% stake in PDO, with the remaining shares held by UK-based Shell (34%), France’s TotalEnergies (4%) and Thailand’s PTTEP (2%).

  In September, PDO awarded the main contract for an integrated project to produce natural gas from the Budour and Tayseer fields. The project aims to expand the capacity of existing gas production and processing facilities at Tayseer as part of the field’s second development phase. PDO will also appraise, produce and process sweet gas from the Budour field, located about 50 kilometres west of Tayseer.

  Kuwait-based Spetco International Petroleum Company won the design, build, own, operate and maintain (DBOOM) contract for the combined Budour-Tayseer sour gas processing facility.

  PDO has also launched a solicitation of interest with contractors for feed work on the second phase of a project to increase oil production from the Rabab Harweel field in Oman’s southernmost Dhofar Governorate.

  PDO began production from the asset in 2019 following completion of the estimated $3bn Rabab Harweel Integrated Project (RHIP), on which UK-based Petrofac carried out the EPC works.

  The second tranche of the RHIP is an enhanced oil recovery project that involves raising miscible gas injection in additional reservoirs across several smaller fields within the wider development. Scheduled to come on-stream beginning in 2028, tranche two aims to expand oil production capacity and improve gas injection by utilising ullage at the existing Harweel Main Production Station (HMPS).

  The scope also includes sustaining condensate and gas supply by using ullage from the first phase of RHIP, installing a depletion compression facility by 2030, and expanding the off-plot gas supply network.

  According to the request for information document, PDO has yet to decide on the project execution model, with the majority state-owned company considering a feed-to-EPC approach. The scope of work on the RHIP tranche two project is primarily divided into an oil and a gas scope.

  Separately, PDO has begun prequalification for EPC works to develop key on-plot facilities as part of the early phase development of the Dhulaima onshore field.

  The Dhulaima Upper Shuaiba field, located in the Lekhwair cluster within Block 6, will be developed under an operations lease contract with a duration of five years.

  The project’s scope covers EPC activities and all associated civil, mechanical, piping, electrical, fabrication, instrumentation, control, testing, pre-commissioning, commissioning and de-commissioning works.

  PDO has also launched a prequalification exercise for a considerable scheme to appoint one or more contractors to build early production facilities for new appraisal exploration fields, enabling accelerated production and early monetisation.

  Boosting the energy value chain

  State energy conglomerate OQ Group is moving ahead with initiatives to expand natural gas liquids (NGL) production capacity, in line with trends across the Gulf’s national oil companies.

  OQ has launched prequalification for feed works on a project to build an NGL extraction facility in Saih Nihayda in central Oman, which will send condensates to Duqm for fractionation and export.

  Separately, Oman Tank Terminal Company (OTTCO), an OQ subsidiary, and Netherlands-based Royal Vopak signed a shareholder agreement in November to establish a new company in the Special Economic Zone at Duqm (Sezad).

  OTTCO will hold a 51% stake and Vopak the remaining 49%, with the new company set to develop and operate world-class energy storage and terminal infrastructure at Duqm.

  In addition, Energy Development Oman (EDO) has entered into a joint venture with Japan’s Sumitomo Corporation to establish a supply chain management company in the sultanate.

  The entity – set to be the first of its kind in Oman – will be based in Duqm, located in Al-Wusta Governorate on the sultanate’s geopolitically strategic Indian Ocean coast.

  The new company aims to provide supply chain management services to Oman’s energy sector, beginning with oil country tubular goods and later expanding to other products and services across the hydrocarbons value chain, renewables and other energy segments.

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  Indrajit Sen
• 
  Oman prepares for wave of IPP awards

  3 December 2025

  

   

  Contract activity in Oman’s power sector slowed in 2025, yet the sultanate is entering the new year with its diversification plans advancing and procurement for independent power projects (IPPs) gathering pace.

  In the renewables segment, progress continued in September with the award of the sultanate’s fourth large-scale solar IPP. The 500MW Ibri 3 solar IPP was awarded to a consortium of Abu Dhabi Future Energy Company (Masdar), Korea Midland Power and local firms Al-Khadra Partners and OQ Alternative Energy.

  The project also incorporates a 100MWh battery system, making it Oman’s first utility-scale solar-and-storage development.

  Ibri 3 accounted for almost 60% of the power contract awards in 2025. While this reflects a quieter year for investment, it also highlights the transition taking place in the market, with attention shifting towards grid reinforcement and preparations for a series of IPPs expected to advance over the coming period.

  The inauguration of the 500MW Manah 1 and Manah 2 solar IPPs earlier in the year added further capacity, building on the operational Ibri 2 plant, which came online in 2021.

  Wind procurement also continues to advance. In November, Nama Power & Water Procurement Company (Nama PWP) signed a 20-year power purchase agreement with a joint venture of Singapore’s Sembcorp Utilities and OQ Alternative Energy for the Dhofar 2 wind IPP.

  The 125MW plant is scheduled to begin operations in the third quarter of 2027 and will add capacity to the Dhofar Power System (DPS), where Oman’s first commercial wind farm, the 50MW Dhofar project, already operates.

  In the DPS, peak demand is anticipated to grow by 5% a year, from 612MW in 2022 to 837MW in 2029. The Sadah wind IPP, which will add around 99MW to the system once operational, is expected to move forward in the coming months.

  Overall, the direction of the sector remains aligned with national plans to increase renewable energy’s share of electricity generation to 30% by 2030 and expand steadily thereafter.

  Oman’s renewable energy programme is expected to expand considerably by 2030, with about 4.5GW of solar IPPs and around 1GW of wind farms planned across multiple sites.

  Increasing wind power

  The wider wind programme includes the Duqm and Mahoot wind IPPs, which are moving forward and will have a combined generation capacity of more than 600MW. In October, Nama PWP issued a supervisory consultancy services tender for the Duqm project.

  Several awards are expected in the near term. Jalan Bani Bu Ali, a wind IPP of about 100MW, and the 280MW Al-Kamil Wal Wafi solar photovoltaic IPP are among four IPPs currently under bid evaluation.

  While Oman continues to scale up renewable capacity, the need for firm generation remains. Peak demand in Oman’s Main Interconnection System (MIS) is expected to grow at an average of 3.4% a year over the current planning period, reaching about 8,350MW in 2029, up from 6,628MW in 2022. 

  Demand in the MIS is likely to continue rising through the decade, supported by industrial growth, population increases and development in economic zones such as Duqm.

  Nama PWP aims to meet this requirement with two major thermal schemes: the $1.53bn gas-fired Misfah IPP and the $753m Duqm IPP. The state offtaker has received three bids for the development and operation of the plants, which together will supply 2,400MW and are scheduled to begin delivering early power by April 2028.

  Developing the grid

  Similar to previous planning cycles, grid development remains a priority. In September, the GCC Interconnection Authority signed a $500m interim financing agreement with Sohar International Bank to support the development of the direct Oman-GCC electricity interconnection.

  The project involves constructing a 400-kilovolt double-circuit line stretching approximately 530km between the Al-Sila station in the UAE and a new Ibra substation in Oman.

  Once completed, the link will enhance regional power exchange capability, improve reserve margins and support the integration of intermittent renewable power.

  These regional works complement domestic transmission upgrades, including the continued expansion of the Rabt North-South Interconnection. The first phase, completed in 2023, connected the MIS with the Duqm Power System.

  Construction works are ongoing on the second phase, which is expected to reinforce the 400kV backbone southwards toward Dhofar.

  New technologies are also emerging in Oman’s power programme. Ibri 3 represents the first deployment of utility-scale battery storage in the sultanate, setting a precedent for integrating storage with future renewable projects. 

  In parallel, Nama PWP and Oman Environmental Services Holding Company (Beah) are preparing to tender the main contract for a 100MW waste-to-energy (WTE) project in Barka.

  Estimated to cost almost $1bn, the scheme would be Oman’s first major WTE facility and reflects broader efforts to embed circular-economy principles into the national infrastructure programme.

  Water sector

  The water sector recorded a solid year, with about $1bn in contract awards, although activity remained below 2024 levels.

  In March, China National Electric Engineering Corporation (CNEEC) won the main contract for a $200m deep-sea desalination project, heading a list of smaller wastewater and transmission packages awarded across 2025.

  Following the commissioning of the Barka 5 independent water project (IWP) and continued construction on the Ghubrah 3 IWP, planning attention has shifted to the next cycle of capacity.

  The next major scheme expected to move forward is a $150m desalination plant in Dhofar, with a planned capacity of 22 million imperial gallons a day.

  Rising water demand in Sharqiyah and Dhofar continues to guide long-term planning with more than $800m-worth of water transmission and treatment schemes set to be awarded in the near to medium terms.

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  Mark Dowdall
• 
  Local contractor wins Saudi substation deal

  3 December 2025

  Saudi Arabia-based Nesma Infrastructure & Technology has signed a contract with state-owned utility Saudi Electricity Company (SEC) to replace the Jubail Southeast 230/115/34.5kV substation.

  The project includes overhead transmission line (OHTL) works and is valued at more than SR840m ($224m). It is scheduled to be delivered within 20 months.

  The award forms part of SEC’s ongoing programme to upgrade ageing substations and reinforce network capacity in the Jubail industrial area.

  In September, local contractor Al-Fanar Projects was appointed to replace the Jubail Southwest 230/115KV substation, one of several transmission assets in the region undergoing phased renewal.

  As MEED recently reported, SEC has plans to invest SR220bn ($58.7bn) in power projects by 2030. This includes SR135bn ($36bn) and SR85bn ($22.7bn) for transmission and distribution, respectively.

  According to the utility, its planned upgrades will cover 130 high-voltage substations, 135,000 MVA of capacity, 12,900 kilometres of overhead transmission lines and 1,100km of underground cables.

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  Mark Dowdall