Contractors vie for schemes worth $270bn

21 December 2023

Following one of the best years for project contract awards in the Middle East and North Africa (Mena) region in a decade, 2024 has a lot to live up to if it is to generate a similar amount of project activity. 

By mid-December, the value of contract awards in 2023 had exceeded $230bn and was just $10bn shy of the $240bn-worth of regional contract awards let in 2014 – the best year on record to date. It was also on track to exceed that record year, with $36bn of projects in bid evaluation and expected for award by year’s end.

Nevertheless, 2024 has the potential to be an even better year for the Mena projects markets than 2023, with more than $270bn-worth of projects in the bidding phase and either overdue, due for award in the final weeks of 2023 – at the mid-December mark – or set for award at some point during 2024.

On top of this significant value of projects in the bidding stage, the region also has an estimated $250bn-worth of work in the design phase, with project trajectories that could quite reasonably see the schemes proceed through the prequalification, tendering and main contract award phases within the next 12 months.

Of the $270bn of value in the bidding stage, $126bn is in bid evaluation, with the main contract imminently due for award. A further $67bn is at the bid submission stage and $77bn is at the prequalification stage.

Imminent awards

Among the projects that are in the bidding phase and due for award in 2024 are six projects worth $4bn or more – all of which are in the GCC, with three in the UAE and one in each of Kuwait, Qatar and Saudi Arabia. They include three oil and gas projects, two power plants and one transport scheme.

The largest project contract in both the bidding phase, and specifically bid evaluation, is the estimated $7bn scheme for the development of surface facilities as part of the UZ1000 expansion programme by the offshore arm of Abu Dhabi National Oil Company (Adnoc Offshore) at the UAE’s Upper Zakum oil field. 

Bids for the project have been submitted by the UK’s Petrofac, the local Target Engineering Construction Company and Spain’s Tecnicas Reunidas.

The next largest project in the bidding phase is the $6bn first package of the Duwaiheen nuclear power plant project, which entails the construction of two 2,800MW nuclear reactors on behalf of the Saudi special purpose vehicle Duwaiheen Nuclear Energy Company. Expected bidders include France’s EDF, China National Nuclear Corporation, Korea Electric Power Corporation and Russia’s Rosatom.

The third largest scheme, and one that is at the prequalification stage, is the estimated $4.8bn Blue Line for the Dubai Metro, tendered by the Roads & Transport Authority after the project was greenlit in November 2023. Expressions of interest for the 12-station line are being sought from three consortiums.

Close behind this is the $4.5bn Ruwais liquefied natural gas terminal, which is being tendered by Adnoc Gas Processing, and for which more than half a dozen companies have submitted bids.

In Kuwait, the $4bn combined phases two and three of Al-Zour North independent water and power project are being tendered by the Ministry of Electricity & Water via the Kuwait Authority for Partnership Projects. Five bidders have submitted prequalification documents for the scheme. 

Pending in Qatar, there is the $4bn phase two, scope D of works on the North Field production sustainability project, for which submissions to QatarEnergy LNG are due by the end of December.

Top markets

The country with the highest value of project work in the bidding phase – and more than double that of the next most active projects market – is Saudi Arabia, which alone has schemes worth $107bn. This includes $46.5bn-worth of work in bid evaluation, $34.3bn in bid submission and $26.4bn at the prequalification stage.

The work in Saudi Arabia is concentrated in the hands of several large clients, led by Saudi Aramco, which has $22bn-worth of work under bid, and Neom, which has $19bn of associated projects under bid. 

There is a further $8.6bn-worth of work associated with the four other official gigaprojects: Diriyah Gate, Qiddiya, the Red Sea Project and Roshn. There is also $7.7bn-worth of work in the bidding phase as part of the Saudi Power Procurement Company’s renewable energy programme.

The projects market with the second-largest value of imminently pending work is the UAE, with $51.5bn-worth of work under bid, including schemes worth about $30bn in bid evaluation. This work is led by the oil and gas sector, with $22.6bn of work being tendered by Adnoc Group. 

Elsewhere in the GCC, Kuwait, Oman and Qatar have, respectively, $19.8bn, $17.9bn and $15.7bn of projects under bid. Overall, the GCC markets account for $216bn or 80 per cent of the $270bn total of work under bid, with Saudi Arabia and the UAE alone accounting for $159bn-worth of work, or 59 per cent of the total.

Close behind these markets is Algeria, which has $15.3bn-worth of schemes in the bidding phase, alongside lesser values in Egypt and Iraq, at $10.7bn and $7.7bn, respectively. There is then a further $24bn-worth of work under bid spread across the other countries in the Mena region.

Strongest sector

Segregated by industry, of the $270bn-worth of work in the bidding stage, there are: projects in the construction and transport sector worth a combined $97.7bn; schemes worth $97.6bn in the power, water and utilities sector; and programmes worth $74.8bn in energy industry.

This breaks down further into $53.1bn of transport projects, $44.6bn of construction projects, $59.7bn of power projects, $37.8bn of water projects, $32.9bn of gas projects, $29.2bn of oil projects, and $12.6bn of chemicals and other industrial schemes.

Top clients

The top 10 project clients in the region by value of projects currently in the bid stage account for $103bn or 38 per cent of the $270bn of total project value under bid. Out of this group of regional heavyweight project owners, five are Saudi entities: Saudi Aramco, Neom, Saudi Power Procurement Company (SPPC), Duwaiheen Nuclear Energy Company (DNEC) and Saudi Electricity Company (SEC).

The top project client outside of Saudi Arabia is the UAE’s Adnoc, which comes second only to Saudi Aramco in terms of the value of projects in the bidding stage. Adnoc is accompanied in its representation of the UAE in the ranking by Dubai’s Road & Transport Authority (RTA). 

The list is then rounded out by Algeria’s Sonelgaz and two Kuwaiti entities: Kuwait Authority for Partnership Projects (Kapp) and Kuwait Oil Company (KOC).

Both Saudi Aramco and Adnoc have more than $20bn-worth of projects under bid, followed closely by Neom, which has $17.6bn-worth of projects across its constituent masterplans, led by Oxagon, Trojena and The Line. 

The three Saudi utilities sector clients, SPPC, DNEC and SEC, then have $7.3bn, $6.5bn and $6.3bn under bid, respectively. Sonelgaz is close behind, with $6.2bn under bid, followed by Kapp, the RTA and KOC, with $6bn, $5.4bn and $4.9bn, respectively, under bid.

The line-up reflects the broader pattern of a strong concentration of project activity in the Mena region within the GCC, and especially within Saudi Arabia and the UAE, as the pre-eminent GCC projects markets. 

 Top pending projects in 2024 (to be published on 27 Dec 2023)
John Bambridge
Related Articles
  • Facility E nears 25 July bid deadline

    19 July 2024


    The tender closing date of 25 July remains unchanged for the contract to develop and operate Qatar’s Facility E independent water and power producer (IWPP) project.

    At least one developer team is highly likely to submit a proposal to develop the gas-fired plant, sources close to the project tell MEED.

    Qatar state utility General Electricity & Water Corporation (Kahramaa) had previously extended the tender closing date for the contract in response to developers’ requests, as MEED reported.

    The Facility E IWPP scheme will have a power generation capacity of 2,300MW and a water desalination capacity of 100 million imperial gallons a day (MIGD).

    “We hear that at least one consortium is being formed … others are preparing proposals, but appear unsure if they will ultimately submit them or not,” a source close to the project told MEED in November last year. 

    Kahramaa initially expected to receive bids on 14 December 2023.

    The contract to develop the Facility E IWPP was first tendered in 2019. The three teams that submitted bids for the contract in August 2020 were:   

    • Engie (France) / Mitsui (Japan) / Yonden (Shikoku Electric, Japan)
    • Sumitomo / Kansai Electric (Japan)
    • Marubeni / Kyushu Electric (Japan)

    The original plan was for the Facility E IWPP to have a power generation capacity of about 2,300MW and a desalination component of 100MIGD once fully operational.

    However, the project owner revised the power plant’s design capacity to 2,600MW and sought alternative prices from bidders. 

    Kahramaa eventually cancelled and reissued the tender in September 2023. The current tender entails a power generation plant with the same capacity as initially tendered in 2019.

    MEED understands that the new target commercial operation date for the Facility E IWPP project has been moved to 2027. 

    The state utility’s transaction advisory team includes UK-headquartered PwC and Clyde & Co as financial and legal advisers, respectively, led by Belgrade-headquartered Energoprojekt as technical adviser.

    Facility E is Qatar’s fifth IWPP scheme. Completed and operational IWPPs include three projects in Ras Laffan – known as Facilities A, B and C – and Facility D in Umm Al-Houl.

    Awarded in 2015 and completed in 2018, Facility D was developed by a Japanese consortium of Mitsubishi Corporation and Tokyo Electric Power Company (Tepco). South Korea's Samsung C&T was the engineering, procurement and construction contractor.
    Jennifer Aguinaldo
  • Masdar’s second bond issue raises $1bn

    19 July 2024

    Abu Dhabi Future Energy Company (Masdar) has raised $1bn through its second bond issuance under its Green Finance Framework.

    The announcement comes one year after the company’s first successful issuance of $750m on the International Securities Market of the London Stock Exchange.

    Masdar said the issuance comprises dual tranches of $500m each, with tenors of five and 10 years and coupons of 4.875% and 5.25%, respectively.

    It said there was strong appetite from regional and international investors, with the order book peaking at $4.6bn – 4.6 times oversubscribed.

    The company finalised the allocation with an average split of 70% to international investors and 30% to Middle East and North Africa investors.

    The $1bn proceeds from the issuance will be deployed to fund Masdar’s equity commitments on new greenfield projects, including several in developing economies, as the company pursues a target portfolio capacity of 100GW by 2030.

    In line with Masdar’s corporate credit ratings, the second issuance was rated AA- by Fitch and A2 by Moody’s.

    First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Standard Chartered, Credit Agricole CIB, Natixis and MUFG were the lead managers and bookrunners on the issuance.
    Jennifer Aguinaldo
  • Firms seek to prequalify for 12 Saudi water projects

    18 July 2024


    Local and international utility developers have submitted their statements of qualifications (SOQs) for the contracts to develop and operate 12 water public-private partnership (PPP) projects in Saudi Arabia. 

    State-backed offtaker Saudi Water Partnership Company (SWPC) received separate responses from companies for five independent water projects (IWPs) and seven independent sewage treatment plant (ISTP) projects by 4 July, industry sources tell MEED.

    Local and regional companies, in addition to Japanese, Spanish, French and Chinese utility developers, are understood to have sought to prequalify to bid for the contracts, which are set to be tendered in 2024-26. 

    SWPC's shift from a single-project to a multiple-project prequalification process saves time and resources, according to one of the companies that submitted an SOQ.

    "This is particularly true for international developers, which need to allocate resources across various geographies," the source said.

    Another source said he believes SWPC will prequalify companies for lead and technical roles, among others, and then allow these companies to form teams at a later stage.  

    The client previously said that the programme "will provide the opportunity to local and international developers to obtain pre-qualification approval and receive the request for proposal documents for its future projects … without the need to submit a separate qualification application for each project".

    The five IWP schemes have a total combined capacity of 1.7 million cubic metres a day (cm/d). The seven ISTP projects have a total combined capacity of 700,000 cm/d.

    The kingdom's water sector has been undergoing a restructuring programme, with the capacity procurement process linked to the National Water Strategy being undertaken by three other clients: Saline Water Conversion Company, which has been renamed Saudi Water Authority; Water Transmission & Technologies Company; and the National Water Company.
    Jennifer Aguinaldo
  • Nama appoints 2027-29 procurement advisers

    18 July 2024


    Oman's Nama Power & Water Procurement (Nama PWP) has appointed a transaction advisory team to support its 2027-29 power and water procurement strategy.

    According to an industry source, the team comprises UK-headquartered Deloitte as lead transaction and financial adviser, Canada-based engineering consultancy WSP as technical adviser, and US firm CMS as legal adviser.

    The scope of work won by the advisory team includes preparing the overall procurement strategy, extending existing contracts expiring between 2027 and 2029, and undertaking procurement for new-build plants.

    The contracts for three independent power projects (IPPs) in Oman with a total combined capacity of 3,518MW are expiring between 2028 and 2029, according to the state offtaker's latest Seven-Year Planning Statement, which covers the years 2023 to 2029.

    These gas-fired plants and their power generation capacities are:

    • Barka 3 IPP: 750MW (2028)
    • Sohar 3 IPP: 750MW (2028)
    • Sur IPP: 2,018MW (2029)

    Phoenix Power Company, the project company for the 2,018MW Sur IPP, comprises Japan's Marubeni Corporation and Jera and Qatar's Nebras Power. 

    Shinas Generating Company – owned by Saudi Arabia's Acwa Power, Japan's Mitsui and China's Didic – is the project company for Sohar 3.

    Al-Suwaidi Power is the project company for Barka 3. It comprises France's Engie, Japan's Shikoku Electric and the local Suhail Bahwan Group.
    Jennifer Aguinaldo
  • UAE keen to start next nuclear plant phase

    18 July 2024

    The UAE government could start the tendering process this year for the state's next nuclear power plant, located in Abu Dhabi, according to a Reuters report citing a senior UAE government official.

    According to the report, Hamad Alkaabi, the UAE's permanent representative to the Austria-based International Atomic Energy Agency, said: "The government is looking at this option. No final decision has been made in terms of the tender process but I can tell you that the government is actively exploring this option."

    The government has yet to budget for a second power plant or decide on the size or location of such a project, but Alkaabi said it is possible a tender could be issued this year, the report added.

    A significant increase in electricity use over the next decade, driven by population growth and an expanding industrial sector, underpins the plan to proceed with the next phase of the state's civilian nuclear power programme.

    Any new power plant would likely consist of two or four reactors, said Alkaabi, who also serves as the deputy chairman of the board of management of the UAE's Federal Authority for Nuclear Regulation.

    The next phase of the Barakah power plant, comprising reactors five to eight, has been in the planning stage since 2019, according to regional projects tracker MEED Projects.

    The UAE became the first Arab state to operate a nuclear power plant when the first of the four reactors at Abu Dhabi’s Barakah nuclear power plant became operational in 2021.

    Each of the four reactors at the Barakah nuclear power plant can produce 1,400MW of electricity.

    Three of the plant’s four reactors are operational. Emirates Nuclear Energy Corporation's operating and maintenance subsidiary, Nawah Energy Company, completed the loading of fuel assemblies into Unit 4 in December 2023. 

    Unit 4 will raise the Barakah plant’s total clean electricity generation capacity to 5,600MW, equivalent to 25% of the UAE’s electricity needs.

    Korea Power Corporation is the prime contractor for the $24.4bn first phase of the Barakah nuclear power plant.

    GlobalData expects nuclear power capacity in the Middle East and North Africa region to grow from zero in 2020 to an estimated 7.1GW by 2030, mainly thanks to Abu Dhabi’s Barakah nuclear energy plant and the first reactors of Egypt’s El-Dabaa nuclear power plant.

    The UAE is one of more than 20 countries that committed to tripling global nuclear energy capacity by 2050 at the UN climate change summit Cop28, which was held in Dubai in late 2023.
    Jennifer Aguinaldo