meed-logo

line1 line2 line3
SIGN IN / REGISTER

Unlocking AI’s carbon conundrum

31 January 2025

 

This package also includes: Trump 2.0 targets technology

Abu Dhabi has recently launched a $6bn project that combines 5,200MW of solar and 19 gigawatt-hours (GWh) of battery energy storage capacity to deliver 1,000MW of round-the-clock renewable power capacity, a world first. 

The project addresses the intermittency of renewable energy, which UAE Industry & Advanced Technology Minister Sultan Al-Jaber describes as the “moonshot challenge” of our time.

The goal is to deliver clean baseload capacity much more quickly and at a lower price than a gas or nuclear power plant.

At approximately $60 a megawatt-hour, the project aligns with the mandate of Emirates Water & Electricity Company (Ewec) to deliver the lowest-cost energy transition.

Abu Dhabi Future Energy Company (Masdar) will develop the project, which will help to boost its gross capacity, in line with expanding its renewable energy portfolio to 100GW by 2030.

Located on a land area of 90 square kilometres, the solar and battery project is due to become operational by 2027, Masdar’s chief operating officer, Abdulaziz Alobaidli, said on 14 January.

This is in addition to the 1.5GW of annual renewable capacity that Ewec intends to procure until at least the mid-2030s, in line with decarbonising the emirate’s electricity system and reaching net zero by 2050.

Following the project’s launch, Masdar announced the preferred engineering, procurement and construction and other sub-
contractors for the scheme. 

AI and power link 

In December, the US government reportedly approved the export of advanced artificial intelligence (AI) chips to a Microsoft-operated facility in the UAE, as part of the technology giant’s $1.5bn partnership with Mubadala-backed AI firm G42.

Three months earlier, in September, Sheikh Tahnoon Bin Zayed Al-Nahyan, deputy ruler of Abu Dhabi and national security adviser, met with Jake Sullivan, US national security adviser, in Washington to seal an agreement known as the Common Principles for Cooperation on AI, following a meeting between UAE President Mohamed Bin Zayed Al-Nahyan and then-US President Joe Biden.

The meeting took place a few days after US-based equity investment firm BlackRock announced a $100bn tech investment platform called Global AI Infrastructure Investment Partnership.

The fund’s partners include Mubadala-backed AI fund MGX, which aims to build $100bn in assets under management; US-based Global Infrastructure Partners; and Microsoft.

In January, MGX teamed up with US tech giant Oracle, Japan’s Softbank and ChatGPT creator Open AI to form the Stargate project, a joint venture that aims to invest $500bn in building AI infrastructure in the US over the next four years.

Abu Dhabi has not denied the link between its clean energy capacity buildout and the UAE’s national, and perhaps international, AI strategy.

A social media post on 14 January by President Mohamed Bin Zayed confirmed the 1GW solar plus battery project will directly support Abu Dhabi’s AI plans.

“The project will help power advancements in AI and emerging technologies, supporting delivery of the UAE National Strategy for Artificial Intelligence 2031 and the Net Zero by 2050 strategic initiative,” he said.

Investing in and developing AI infrastructure and applications at home and abroad is now a UAE government priority. It will create jobs and new revenues, and will boost efficiencies in every facet of governance and business.

“The UAE is well positioned [in the developing AI industry],” says Michael Liebreich, managing partner at UK firm EcoPragma Capital, noting that it has “the energy status, geographical advantage and regulatory framework”.

In light of a new US regulation made public in January that restricts access to US-made AI chips, he adds that “you don’t want to have a situation where the UAE will have to choose between one or the other”, referring to the ongoing power struggle over AI between China, an important energy and trade partner of the UAE, and the US, which is a vital political ally.

Investing in and developing AI infrastructure and applications … is now a UAE government priority

Choosing sides

It appears that this choice has been made previously, however.

In an interview in early 2024, G42 CEO Peng Xiao said that his firm is cutting ties with Chinese hardware suppliers in favour of US counterparts, adding: “We cannot work with both sides.”

In addition, in December, Axios – the US media outlet that reported the clearance of AI chip exports by the US to the Microsoft and G42 facility in Abu Dhabi – suggested that the deal is part of efforts by the US government to elbow China out of the UAE’s expanding tech industry.

In Abu Dhabi, Ewec is tasked not only with decarbonising its electricity system by integrating solar and nuclear plants into its gas-dominated power-generation fleets, but also with ensuring 24×7 clean and cheap baseload capacity gets delivered to a project that is a national priority.

An expanding AI industry will also increase the scope for environmental, social and governance (ESG) compliance.

While it is widely accepted that the use of advanced AI solutions such as large- or small-language models or agentic AI for industrial applications can enable some sectors to cut emissions, AI requires hyperscale data centres, and data centres generally are as polluting as the airline industry.

Although the high temperatures and water scarcity of the Middle East can be addressed by another ESG-sensitive industry – seawater desalination – these factors can lead data centres in the region to be more carbon positive than those in other geographies.

For this reason, Abu Dhabi’s 5.2GW/19GWh project is considered a major milestone, potentially blazing a trail that other regions can follow – assuming it is implemented on time and within budget, and despite opposing opinions on its technical and commercial feasibility.

Main image: Sheikh Tahnoon Bin Zayed Al-Nahyan, deputy ruler of Abu Dhabi and national security adviser, and Jake Sullivan, US national security adviser, signed a cooperation agreement on AI in September 2024. Credit: Wam

Trump 2.0 targets technology

READ MEED’s YEARBOOK 2025

MEED’s 16th highly prized flagship Yearbook publication is available to read, offering subscribers analysis on the outlook for the Mena region’s major markets.

Published on 31 December 2024 and distributed to senior decision-makers in the region and around the world, the MEED Yearbook 2025 includes:

> GIGAPROJECTS INDEX: Gigaproject spending finds a level
https://image.digitalinsightresearch.in/uploads/NewsArticle/13353267/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Aramco turns attention to strategic projects

    12 September 2025

     

    In the second quarter of 2025, Saudi Aramco’s capital expenditure (capex) stood at $12.3bn, marking a marginal year-on-year increase of 1.46%. For the first half of the year, the company recorded capex of $24.85bn, up 9.5% compared to the same period last year.

    The company had earlier issued capital investment guidance of $52bn to $58bn for 2025, excluding approximately $4bn in project financing.

    Concerns grew in Saudi Arabia’s offshore oil and gas projects market earlier this year as engineering, procurement, construction and installation (EPCI) contract awards stalled.

    Aramco spent a record $5bn on offshore EPCI contracts in 2024 and was expected to surpass that in 2025. However, it awarded no Contract Release Purchase Orders (CRPOs) in the first half of the year, fuelling apprehension among contractors and suppliers.

    In July, Aramco dispelled speculation by awarding five tenders worth over $3bn. The CRPOs are numbers 150, 157, 158, 159 and 160, and involve EPCI work and infrastructure upgrades at the Abu Safah, Berri, Manifa, Marjan and Zuluf offshore oil fields.

    Aramco also awarded four additional CRPOs as part of a large-scale infrastructure expansion at the Zuluf offshore field. These are CRPOs 145, 146, 147 and 148, with a combined estimated value of nearly $6bn.

    With these contract awards, Aramco has nearly doubled its offshore capex this year compared to 2024, marking another year of robust upstream investment.

    Looking ahead, Aramco is evaluating bids received for seven key tenders in July and August.

    These tenders include CRPOs 154, 155 and 156, representing the next phase of infrastructure expansion at the Safaniya offshore oil field; CRPO 161, which covers the EPCI of four gas jackets at the Arabiyah, Hasbah and Karan fields; and CRPOs 162, 163 and 164, relating to the EPCI of key infrastructure at the Abu Safah, Berri, Karan, Marjan and Safaniya fields.

    Onshore projects advance

    In parallel with the Safaniya offshore expansion, Aramco is tendering a separate project to build onshore surface and processing facilities to handle additional volumes of oil and associated gas generated by the expanded offshore infrastructure.

    The scope of the Safaniya onshore facilities project has been divided into two main EPC packages: the first covering water treatment and injection units, and the second focused on produced water utilities. Contractors have been given deadlines of 24 October and 7 November to submit technical and commercial bids.

    Aramco is also understood to be close to awarding the main EPC contracts for the expansion of the Haradh gas-oil separation plant 3 (Gosp 3) in Saudi Arabia. Located within the Haradh hydrocarbons development in the Eastern Province, the project will increase output of the Arab Light crude grade from 300,000 barrels a day (b/d) to 420,000 b/d. It will also raise sour gas production to 32 million cubic feet a day (cf/d).

    Ramping up gas production

    In line with its goal of increasing gas production, Aramco is progressing its Jafurah unconventional gas programme. Situated in Saudi Arabia’s Eastern Province, the Jafurah Basin contains the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. The shale play spans approximately 17,000 square kilometres.

    The Jafurah programme is a cornerstone of Aramco’s long-term gas strategy, with total lifecycle investment expected to exceed $100bn. In February 2020, Aramco received a capex allocation of $110bn from the Saudi government to support the long-term phased development of the unconventional gas resource base.

    Aramco is estimated to have spent $25bn across the first three phases of Jafurah’s development. In November 2021, the company awarded $10bn in subsurface and EPC contracts for phase one of the programme.

    On 30 June 2024, Aramco awarded 16 contracts worth approximately $12.4bn for phase two. The scope includes the construction of gas compression facilities, associated pipelines and the expansion of the Jafurah gas plant – covering gas processing trains, utilities, sulphur handling and export infrastructure.

    In July 2024, a consortium of Spain’s Tecnicas Reunidas and China’s Sinopec was awarded a $2.24bn EPC contract by Aramco for phase three of the expansion.

    Phase four of the Jafurah expansion is estimated at $2.5bn. The scope includes EPC works for three gas compression plants, each with a capacity of 200 million cf/d. Bids were submitted in mid-January, remain valid through September, and are under evaluation, with a contract award expected in Q4 2025.

    Aramco is also tendering a major project to boost gas compression capacity at the Shedgum and Uthmaniya plants in the Eastern Province.

    The facilities currently receive approximately 870 million cf/d and 1.2 billion cf/d of Khuff raw gas, respectively. The project aims to increase compression and processing capacity and to construct new pipelines to enhance gas transport.

    Contractors are preparing bids for several EPC packages under the Shedgum and Uthmaniya gas compression project.

    MEED’s October 2025 special report on Saudi Arabia also includes:

    > ECONOMY: Riyadh looks to adjust investment approach
    > BANKING: New funding sources solve Saudi liquidity challenge
    > GAS: Saudi Arabia and Kuwait accelerate Dorra gas field development
    > POWER: Saudi Arabia accelerates power transformation
    > CONSTRUCTION: Saudi construction pivots from gigaprojects to events
    > TRANSPORT: Infrastructure takes centre stage in Saudi strategy

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14656451/main.png
    Indrajit Sen
  • GCCIA signs $500m deal for Oman power link

    12 September 2025

    The GCC Interconnection Authority (GCCIA) has signed a $500m interim financing agreement with Sohar International Bank to support the planned direct electricity interconnection between Oman and the GCC grid.

    The project will involve building a 400-kilovolt double-circuit transmission line linking the Al-Sila station in the UAE with a new Ibri station in Oman. The line will span 530km.

    The Al-Sila station, located in Abu Dhabi near the border with Saudi Arabia, is owned and operated by GCCIA. It is a key node in the existing Gulf power grid, enabling the transfer of electricity between the UAE, Saudi Arabia and other GCC states.

    The Ibri station will be newly developed by GCCIA as part of the interconnection project. Situated in Oman’s Al-Dhahirah governorate, the facility will act as the entry point for linking Oman’s national grid to the wider GCC network. Oman is currently connected via the UAE grid.

    The link will provide a transmission capacity of 1,700MW and a net transfer capacity of 1,200MW.

    In February, MEED reported that the interconnection project would require around $700m of investment.

    It had previously been estimated that the project could cost around $1bn.

    The Qatar Fund for Development (QFFD) signed an agreement with the GCCIA in the same month to finance part of the electricity transmission network that will form Oman’s second link with the GCCIA network.

    Local media reports suggested that QFFD would provide around $100m for the project.

    Although a contract has yet to be awarded, it is understood that Bahwan Engineering Company is among the firms that have submitted bids for the project.

    In June, Abu Dhabi Fund for Development (ADFD) signed a financing agreement with the GCCIA to support a $205m project linking the Al-Sila substation to Saudi Arabia’s Salwa substation.

    This involves the construction of a 400kV double-circuit overhead transmission line extending 96km and includes the expansion of three key substations in Gonan, Al-Sila and Salwa.

    Oman’s first link with the GCCIA became operational in November 2011.

    It comprises a 200kV line connecting the Mahadha grid station in Al-Wasit, Oman, to the Al-Oha grid station in Al-Ain, UAE.

    Projects are also under way for interconnection with Kuwait, as well as with Iraq, as part of a major investment.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14656220/main.jpg
    Mark Dowdall
  • Qatar’s Ashghal awards $101m construction contracts

    12 September 2025

    Qatar’s Public Works Authority (Ashghal) has awarded two contracts worth over QR368m ($101m) for the construction of projects across various locations in the country.

    The first contract, worth QR228m ($62m), was awarded to the local firm Bo Jamhoor Trading & Contracting Company. The scope of the contract encompasses the construction of three new schools at different sites in Qatar.

    The other QR140m ($38m) contract was awarded for the repair and renovation works at the Al-Zubara horse breeding farm, located about 60 kilometres (km) from Doha.

    The contract was awarded to the local firm Generic Engineering Technologies & Contracting.

    The latest award follows Ashghal’s issuance of a tender inviting firms to bid for the construction of roads and infrastructure in Wadi Al-Banat North, Zone 70.

    The tender was floated on 3 September, with a bid submission date of 30 September.

    The contract duration is three years from the start of construction.

    Market overview

    After 2019, there was a consistent year-on-year decline in contract awards in Qatar’s construction and transport sectors. The total value of awards in that year was $13.5bn, but by 2023 it had fallen to just over $1.2bn.

    In 2024, the value of project contract awards increased to $1.7bn, bucking the downward trend in the market in the preceding four years.

    Of last year’s figure, the construction sector accounted for contract awards of over $1.2bn, while transport contract awards were about $200m.

    There are strategic projects worth more than $5bn in the bidding phase, and these are expected to provide renewed impetus to the construction and transportation market, presenting opportunities for contractors in the near term.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14656436/main.gif
    Yasir Iqbal
  • Saudi Arabia seeks consultants for Riyadh rail link

    12 September 2025

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia Railways (SAR) has floated a tender notice inviting consultants to bid by 28 September for a contract covering the design review and construction supervision for the Riyadh rail link project.

    The 35-kilometre-long double-track rail line will run from the north of Riyadh to the south, connecting SAR's North-South railway network with the Eastern Railway network.

    Last week, MEED exclusively reported that SAR had asked contractors to prequalify for a contract covering the construction of the Riyadh rail link.

    The contract also includes the procurement, construction and installation of associated infrastructure, including viaduct construction, civil works, utility installations, signalling systems and other associated works.

    The project is expected to become a key component of the Saudi Landbridge railway.

    The Saudi Landbridge is an estimated $7bn project comprising more than 1,500km of new track. Its core component is a 900km new railway between Riyadh and Jeddah, which will provide direct freight access to the capital from King Abdullah Port on the Red Sea.

    Other key sections include upgrades to the existing Riyadh-Dammam line and a link between King Abdullah Port and Yanbu.

    The start of the tendering activity for the Riyadh rail link project makes the construction of the Saudi Landbridge project even more likely. 

    The project is one of the kingdom’s most anticipated infrastructure programmes. Plans to develop it were first announced in 2004, but the project was put on hold in 2010 before being revived a year later.

    Key stumbling blocks were rights-of-way issues, route alignment and its high cost.

    In December 2023, MEED reported that a team of US-based Hill International, Italy’s Italferr and Spain’s Sener had been awarded the contract to provide project management services for the programme.

    If it proceeds, the Landbridge will be one of the largest railway projects ever undertaken in the Middle East – and among the biggest globally.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14655581/main.jpg
    Yasir Iqbal
  • Petrofac agrees restructuring deal with Samsung and Saipem

    12 September 2025

    The UK-based engineering company Petrofac has announced that it has reached an agreement in principle with South Korea’s Samsung E&A and Italy’s Saipem that will allow the company to restructure.

    The announcement comes more than two months after an appeals court in the UK ruled against Petrofac’s restructuring plans and in favour of Samsung E&A and Saipem.

    The dispute between the three firms, which all have a significant presence in Middle East oil and gas projects, is centred on Petrofac’s participation in the $4bn Thai Oil clean fuels project.

    Petrofac said that the commercial terms of the new agreement between the three companies have been supported by an “Ad Hoc Group” of bondholders.

    This refers to a group of senior secured creditors that backstopped the original restructuring plan earlier this year.

    Petrofac has said that it will now “work to conclude discussions with key stakeholders on next steps towards implementation of the restructuring”.

    It added that, “subject to receipt of all requisite approvals and satisfaction of conditions”, it expects its restructuring to be completed by the end of November 2025.

    Petrofac did not give any details about what commercial terms had been agreed with Samsung E&A and Saipem.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14655445/main.jpg