Tunnelling projects take the front seat
22 August 2023
The economic and energy diversification programmes of countries in the Middle East and North Africa have provided an impetus for physical infrastructure projects such as tunnels, which have become emblematic of the region’s transition towards a more interconnected and sustainable future.
In some cases, tunnelling projects in the region also extend beyond their utilitarian functions – in addition to decongesting cities and improving water networks, they embody diplomatic overtones and regional cooperation.
Some of the biggest tunnelling projects in the Middle East have historically been executed in the GCC, especially in Saudi Arabia and the UAE. These two countries also promise the most robust future project pipelines.
Neom tunnels
In line with its strategy of redefining sustainable urban living, the integration of tunnels is key to shaping the landscape at Neom in Saudi Arabia.
Tunnels are core components of the integrated transportation network at Neom's The Line, Oxagon and Trojena developments.
According to regional projects tracker MEED Projects, about $6.9bn-worth of schemes with tunnel components are at the pre-execution and execution phases at Neom.
Tunnel projects worth over $4.6bn are in the execution phase. These include the backbone infrastructure tunnels for The Line project, which involve constructing two railway tunnels in parallel using the drill-and-blast method, one for passengers and the other for goods.
In June 2022, Neom awarded $2.7bn-worth of main contracts to the joint venture of Shibh al-Jazira Contracting, China State Construction Engineering and FCC Construction for lots two and three of this scheme.
A separate contract worth about $1.8bn was awarded by Neom for lots four and five to a team of Archirodon, Samsung Engineering and Hyundai Engineering.
The pipeline of projects with tunnel components at Neom is worth about $2.3bn. Some of the major upcoming projects include the time-travel tunnel and funicular railway at Trojena and a package of works for the Spine railway network at The Line. The main contract bids for both packages are in the evaluation phase.
Other upcoming projects include the Spine's desert coastal west cut-and-cover tunnels for The Line, which are under design, and packages one and two of the delta junction tunnel at Oxagon. Neom expects to receive the bids for both packages by 27 August.
Dubai Deep Tunnels Portfolio
In Dubai, meanwhile, the Deep Tunnels Portfolio includes a series of interconnected deep sewage tunnels and associated facilities. The project involves the construction of two sets of deep tunnels terminating at two pump stations located at sewerage treatment plants (STPs) in Warsan and Jebel Ali.
A conventional sewage and drainage collection system and STPs will be built in Hatta.
First announced in 2015, the Dubai Deep Tunnels Portfolio project has faced delays over the years. The tender for consultancy services was first issued in 2015 and was awarded the following year to US-headquartered Parsons.
In June 2017, Dubai Municipality appointed Dutch consulting firm KPMG to assist with preparing the project under a public-private partnership (PPP) model instead of the conventional engineering, procurement and construction model.
There was no significant progress on the project after Dubai Municipality conducted a geotechnical investigation in late 2017.
This changed in June of this year, however, when Dubai’s Executive Council approved the project and said it would require an investment of about AED80bn ($22bn).
It added that the project has been designed to serve the needs of the Dubai population for the next 100 years, in alignment with the Dubai Economic Agenda D33 and the Dubai Urban Plan 2040.
In August, Dubai Municipality invited firms to express interest in bidding for the contract to provide project management consultancy services for the scheme. It expects to receive prequalification applications by 25 August.
Jeddah stormwater system
Jeddah Municipality is also taking steps to improve the city’s water infrastructure, and is investing in stormwater drainage and management systems.
The latest project under this programme is the King Abdullah Road-Falasteen Road (Kafa) tunnel, which is being developed in two phases. Phase one involves the construction of two main storage tunnels, one 5.3 kilometres (km) long and the other 3.4km long.
The scope of phase two includes constructing a terminal pumping station, a marine outfall and all necessary online and offline shafts.
In March, Jeddah Municipality invited contractors to prequalify for the contract to build the tunnels. It is understood the client received responses to the request for qualifications in June.
US-based Aecom is the consultant for the project.
Morocco's undersea rail link
In June this year, the Spanish government revived the Morocco-to-Spain undersea rail link project after allocating about $2.5m for a renewed design study.
The project was launched in 2003 but was put on hold after the 2008 financial crisis. It has undergone several rounds of feasibility studies but remains in the study stage after nearly two decades of funding-linked delays.
The plans involve a double-rail track and additional service line stretching 38.5km between Tarifa in Spain and Tangier in Morocco. A 28km section will run under the Mediterranean Sea at a maximum depth of 475 metres.
The maximum depth of the tunnels will be 300 metres. Each single-track tunnel will have an inner diameter of 7.9 metres, while the service gallery will be 6 metres in diameter.
The two countries are developing the project jointly through Morocco’s National Society for Strait of Gibraltar Studies and the Sociedad Espanola de Estudios para the Comunicacion Fija a Traves del Estrecho de Gibraltar.
In 2006, Swiss engineering company Lombardi Engineering was selected to design the tunnel and the preliminary studies for the project were completed two years later.
Register for MEED's guest program now to access this article.
Exclusive from Meed
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Lebanon taps foreign players to assess resource potential8 June 2026
Lebanon’s oil and gas sector received a major boost in January this year when French energy major TotalEnergies, Italy’s Eni and QatarEnergy signed an agreement with the Lebanese government to enter the Block 8 concession in the country’s territorial waters and explore for gas reserves.
Under the terms of the deal, TotalEnergies will operate Block 8 and hold a 35% interest, while Eni and QatarEnergy will hold 35% and 30% stakes, respectively.
Block 8 has long been considered the most promising exploration area in Lebanese waters, but previous efforts to award the exploration permit were repeatedly delayed amid concerns over border tensions and political instability.
The block lies along the previously disputed maritime boundary between Lebanon and Israel. In 2022, the two countries signed an agreement to resolve the long-running maritime border dispute.
In a statement, TotalEnergies said: “The consortium's initial work programme on Block 8 consists of the acquisition of a 1,200-square-kilometre 3D seismic survey in order to further assess the area’s exploration potential.”
Exploration efforts
The Lebanese Petroleum Administration hopes that international oil companies will make discoveries that will help bolster the country’s struggling economy.
Lebanon signed its first offshore oil and gas exploration and production agreement in February 2018, awarding Blocks 4 and 9 to a consortium comprising TotalEnergies, Eni and Russia's Novatek following a licensing round in 2017.
In January 2023, QatarEnergy replaced Novatek in the consortium.
Under the agreement, QatarEnergy acquired Novatek’s 20% stake, as well as 5% each from TotalEnergies and Eni, giving the Qatari company a total stake of 30%. TotalEnergies and Eni each retained a 35% interest.
In TotalEnergies’ latest statement, chairman and CEO Patrick Pouyanne said: “Although the drilling of the Qana 31/1 well in Block 9 did not yield positive results, we remain committed to pursuing our exploration activities in Lebanon.
“We will now focus our efforts on Block 8, together with our partners Eni and QatarEnergy and in close cooperation with the Lebanese authorities.”
Futile attempts
More broadly, Lebanon’s offshore oil and gas sector faces an uncertain outlook, characterised by persistent delays, regional conflict and limited exploration activity.
Despite hopes that maritime agreements and improved diplomatic relations would trigger an energy boom, Lebanon currently produces virtually no oil or natural gas. Political bottlenecks, regional instability and previous dry wells have increasingly shifted attention towards alternative domestic energy solutions.
Lebanon’s ambition to become a hydrocarbon producer remains unfulfilled due to a combination of commercial and political obstacles. Initial optimism was tempered when consortiums led by TotalEnergies announced that no commercially viable gas discoveries had been made in either Block 4 or Block 9.
Despite holding licences for potentially prospective acreage, international companies have remained largely inactive in pursuing further deepwater exploration.
Meanwhile, Lebanon’s third offshore licensing round, launched in 2024, has continued to face delays. Nine offshore blocks within the country’s exclusive economic zone were offered, but interest from exploration and production companies has been limited. As a result, the government has repeatedly extended submission deadlines.
Although the landmark 2022 maritime boundary agreement with Israel removed a major obstacle to exploration in southern waters, regional security concerns continue to influence the pace of development.
In late 2025, Lebanon approved a maritime boundary demarcation agreement with Cyprus aimed at clarifying jurisdictional rights and attracting investment to offshore areas.
Progress in northern waters also remains stalled. More than 652 square kilometres of offshore acreage overlap between Lebanese- and Syrian-claimed waters, making any resolution politically sensitive and diplomatically complex.
Regional volatility continues to weigh on investor confidence. While periodic ceasefires may provide temporary relief, ongoing tensions across the region still make large-scale energy infrastructure investments highly risky.
https://image.digitalinsightresearch.in/uploads/NewsArticle/17145363/main.gif -
EtihadWE to auction Al-Zawra power generation assets8 June 2026
Register for MEED’s 14-day trial access
Etihad Water & Electricity (EtihadWE) is preparing to auction used power generation assets from its Al-Zawra facility in Ajman.
The 200MW Al-Zawra gas-fired power plant was developed by the former Federal Electricity & Water Authority (Fewa), which was succeeded by EtihadWE.
The sale includes gas turbines, generators and associated balance-of-plant equipment from the existing generation facility.
The main equipment being offered comprises two GE Vernova / General Electric heavy-duty gas turbines. The units are PG 9171E / 9E machines designed for dual-fuel operation using natural gas and distillate. The package also includes two generators.
EtihadWE said the assets will be sold on an “as is, where is” basis, with interested parties able to arrange site visits and inspections, subject to the relevant approvals.
According to industry sources, the utility’s two power plants in Ajman and Ras Al-Khaimah have been out of service since 2021, and the Ajman plant was decommissioned in 2023.
Companies interested in taking part in the auction should contact:Mohamed.Shabeer@etihadwe.com
khaled.reda@etihadwe.ae
Horizon.PMO@etihadwe.aehttps://image.digitalinsightresearch.in/uploads/NewsArticle/17143852/main.jpg -
Kuwait plans to award $988m upstream contract within 30 days8 June 2026
State-owned upstream operator Kuwait Oil Company (KOC) is planning to officially award a $988m project contract to India’s Larsen & Toubro within 30 days, according to industry sources.
The contract is focused on developing Jurassic Light Oil (JLO) export facilities and upgrading the existing export network.
Kuwait’s Central Agency for Public Tenders (Capt) has approved the award of the contract for the construction of export crude storage facilities and upgrades to the country’s oil export infrastructure.
Now, talks are expected to take place between KOC and Larsen & Toubro to finalise the contract details.
Just two companies submitted bids for the contract in October last year.
The bidders were:
- Larsen & Toubro (India): KD303.5m ($988m)
- Petrofac (UK): KD310.6m ($1.01bn)
Following bid submission, state-owned Kuwait Petroleum Corporation (KPC) discussed the potential cancellation of the contract tender due to the bids coming in significantly over budget and Petrofac becoming ineligible to win contracts in Kuwait.
The financially troubled engineering company was temporarily banned from participation in tenders in Kuwait’s oil and gas sector in December last year.
It was given the ban after the company announced that it had applied to appoint administrators, a move that potentially put thousands of jobs at risk and increased uncertainty for projects worth billions of dollars in the Middle East and North Africa (Mena) region.
Despite holding talks about the potential cancellation of the tender, KPC ultimately decided to proceed with the contract award process because it considered the project a high priority.
One source said: “Around the same time, projects worth around $8bn were cancelled because of bids coming in over budget, but this one has gone ahead because KPC sees it as an essential project.”
The project was originally tendered in November 2024, with a bid deadline of 1 December the same year.
The bid deadline was extended several times before bids were ultimately submitted.
Kuwait’s oil and gas sector is in turmoil as a result of the ongoing regional conflict that started on 28 February when the US and Israel attacked Iran.
Amid the ongoing conflict, Kuwait’s Ministry of Finance has stopped publishing its monthly report with details about revenues from oil exports.
While there are no official figures available, many experts believe that the country failed to export crude oil during April and May.
This is likely to have a severe impact on the country’s economy, which relies on oil exports for approximately 90% of government revenues.
READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDFGCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.
Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
> AGENDA: Gulf races to reroute trade> EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity> CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends> MEED TOP 100: Middle East stocks recover unevenly> LEADERSHIP: Building the infrastructure that makes net zero possible> TRADE DEAL: UK-GCC trade deal talks concludeTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/17143767/main.png -
Amea Power signs 1.5GWh battery storage EPC contracts8 June 2026
UAE-based Amea Power has signed engineering, procurement and construction (EPC) contracts with China Energy Engineering Corporation (China Energy) for two standalone battery energy storage system (bess) projects in Egypt with a combined capacity of 1,500 megawatt-hours (MWh).
The contracts cover the 500MWh Horus battery storage project in Zafarana and the 1,000MWh Nefertiti battery storage project in Benban.
The agreements were signed on 4 June in the presence of Mahmoud Esmat, Egypt’s minister of electricity and renewable energy, Sheikh Hussein Al-Nowais, chairman of Al-Nowais Investments and Amea Power, and Ni Jin, chairman of China Energy.
The projects are part of Egypt’s wider programme to expand energy storage capacity and support the integration of renewable energy into the national grid.
According to the Ministry of Electricity & Renewable Energy, Egypt plans to increase battery storage capacity to 14,320MWh by 2028.
The ministry said the expansion of battery storage is required to support the growing share of solar and wind power generation, improve grid stability and reduce reliance on fossil fuels.
The signing ceremony also included an agreement between Amea Power, China Energy and Chinese battery manufacturer Gotion to establish a battery storage manufacturing facility in Egypt.
The planned factory will have an annual production capacity of 3,000MWh.
Amea Power previously signed capacity purchase agreements with the Egyptian government to develop the country’s first standalone bess projects in 2025.
In March, the government announced it had signed power-purchase agreements for several renewable energy and battery storage projects with a combined capacity of 5.6GW.
These include a 900MW wind power project in the Red Sea Governorate, along with a 2,000MW solar power plant and a 2,000MWh battery storage facility in the Qena Governorate.
> Be recognised among the best in the industry at the MEED Projects Awards 2026 …
https://image.digitalinsightresearch.in/uploads/NewsArticle/17143364/main.jpg -
Opec+ approves fourth consecutive oil output quota hike8 June 2026
The Opec+ alliance of oil producers has agreed a fourth increase in its oil output targets in as many months, even though the conflict involving Iran, the US and Israel is still preventing several members from pumping more crude.
The war has disrupted oil flows via the Strait of Hormuz, creating a severe supply crisis. Key Opec+ members, including Saudi Arabia, have been unable to supply customers in full since the end of February. The crisis for Opec+ deepened when the UAE left Opec after almost 60 years of membership.
Seven core members of Opec+ – which comprises Opec countries and a group of non-Opec states led by Russia – raised their output quotas from April to June by almost 600,000 barrels a day (b/d).
In practice, however, the group’s production has fallen sharply due to export cuts by Gulf members, averaging 33.19 million b/d in April compared with 42.77 million b/d in February, according to Opec figures.
At the latest meeting of Opec+ oil ministers on 7 June, the seven members agreed to increase targets by 188,000 b/d from July, Opec said in a statement. This matches the June hike, which was adjusted down from monthly increases of 206,000 b/d in April and May to take account of the UAE’s exit.
Iraq’s oil output quota will rise by 26,000 b/d from July under the agreement, an oil ministry spokesperson told Iraq’s state news agency.
On 5 June, oil prices fell to about $93 a barrel as traders gained confidence that renewed conflict between the US and Iran was becoming less likely. Prices were close to $72 before the war began on 28 February.
Brent crude rose sharply at the start of this week after Iran launched ballistic missiles at Israel on the night of 7 June, heightening fears that US-Iran peace talks might once again collapse. Israel has since retaliated with strikes in western and central Iran, despite calls from US President Donald Trump not to respond to the Iranian missiles.
Brent crude jumped by around 4.5% early on 8 June and was trading at $97.52 a barrel as of 11am GST.
The seven key Opec+ members are increasing production as part of the gradual unwinding of a 1.65 million b/d production cut agreed in 2023 by the coalition, which at the time included the UAE.
From July, the seven have about 567,000 b/d of the original cut left to return to the market – taking into account the UAE’s exit from 1 May – according to Reuters calculations.
That would imply the remainder of the cut will be unwound by the end of September if Opec+ maintains monthly hikes of about 188,000 b/d in August and September.
The seven of the 21 Opec+ members who met on 7 June were Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman. In recent years, only these seven – plus the UAE when it was a member– have been involved in the group’s output-policy decisions.
In a separate meeting on Sunday attended by all Opec+ members, ministers made no change to the group-wide output policy in place until the end of 2026, Opec+ said in another statement.
Opec+ is also reviewing members’ oil production capacity to use as a reference for 2027 production baselines, from which quotas are set. On Sunday, the group reaffirmed the importance of completing the assessment, the statement said.
ALSO READ: UAE to continue working with Opec, energy minister says
READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDFGCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.
Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
> AGENDA: Gulf races to reroute trade> EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity> CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends> MEED TOP 100: Middle East stocks recover unevenly> LEADERSHIP: Building the infrastructure that makes net zero possible> TRADE DEAL: UK-GCC trade deal talks concludeTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/17143267/main.jpg