meed-logo

line1 line2 line3
SIGN IN / REGISTER

Water developers adopt selective stance

19 September 2024

 

UAE-based utility Sharjah Electricity & Water Authority (Sewa) and Saudi water offtaker Saudi Water Partnership Company (SWPC) each received a single bid for their recently tendered independent water producer (IWP) projects.

An all-local team comprising Acwa Power, Haji Abdullah Alireza & Company (Haaco) and AlSharif Contracting & Commercial Development submitted the sole proposal for the contract to develop the Jubail 4 and 6 IWP schemes in Saudi Arabia.

This is a far cry from the four bids SWPC received in 2020 for a contract to develop and operate the Jubail 3B IWP.

However, the fact that SWPC received only two bids for the contract to develop the smaller Ras Mohaisen IWP in April this year indicates that utility or water developers and investors have increasingly adopted a more selective stance when it comes to bidding for new projects.  

"Combined, Jubail 4 and 6 is a large project and most developers are tied up with other ones, as there are many IWPs under way at the moment, not only in Saudi Arabia but throughout the GCC," says Robert Bryniak, CEO at Dubai-based Golden Sands Management (Marketing) Consulting.

The Jubail 4 and 6 seawater reverse osmosis (SWRO) plants will have a total combined capacity of 600,000 cubic metres a day (cm/d) and will be developed under one contract.

In comparison, the Ras Mohaisen IWP has a capacity of 300,000 cm/d, while Sewa's Hamriyah IWP will have a capacity of 410,000 cm/d. 

Bryniak says that many developers are at, or near, their capacity and this makes it difficult to make short-term commitments without paying significantly more for skilled workers and key equipment component parts. 

"Developers may be shying away from some of the larger projects because of this, especially knowing that tariffs need to be competitive to win.

"Developers have to spend significant amounts just to bid on a project and, if unsuccessful, this sunk cost needs to be eventually recouped on future projects. And I think this is resulting in developers being more selective in terms of the projects they go after, focusing more on those where they believe they have a good chance of winning."

The case is slightly different for the Hamriyah IWP, which is Sharjah's first major SWRO project to be procured on a public-private partnership (PPP) basis.

Acwa Power submitted the sole proposal for the contract to develop the project in December last year.

"This is Sharjah’s first IWP and, unlike other jurisdictions such as Oman, Abu Dhabi and Saudi Arabia, the emirate has yet to establish a track record with PPPs, especially in power and water," explains Bryniak

Given several false starts and issues with past PPPs, it is likely that developers will shy away and focus their efforts on more established – and financially stronger – offtakers elsewhere in the region.

Known for its strong risk appetite, Acwa Power signed the water procurement agreement with Sewa earlier in September and a team of France's Sidem and its parent company Veolia has been selected as the project's engineering, procurement and construction contractor.

This means discussions with banks and financial institutions could be nearing their conclusion, leading to the start of the project's construction. 

Once the Hamriyah IWP reaches financial close and commercial operations, Bryniak says Sewa should be able to attract more developers for future IWPs. 

Going forward, procurers could also consider adopting new or additional measures to attract more developers to their future IWP projects and avoid incurring higher tariffs.

A UAE-based executive with an international developer says that in some cases the quality of the request for proposals (RFPs) being issued can be improved.

MEED understands some of the recent RFPs lack comprehensive information or details, which leads contractors to add higher contingency costs to cover risks. 

Bryniak concurs, adding that going forward, procurers throughout the GCC will need to spend more time and effort marketing and promoting their IWPs, and will need to be more selective in terms of timing, in order to optimise competition.

"They may also need to consider modifying their procurement processes to attract more bidders. Otherwise, they might continue to realise only one or just a few bidders, with likely higher tariffs in the near term."

https://image.digitalinsightresearch.in/uploads/NewsArticle/12557172/main5039.gif
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Joint venture wins Oman desalination contract

    15 October 2026

    Bahwan Veolia Water, a joint venture between France's Veolia and Oman's Bahwan Engineering Company, has signed a five-year operations and maintenance (O&M) contract for the Al-Asilah desalination plant in the sultanate.

    The Al-Asilah plant has a production capacity of 80,000 cubic metres a day (cm/d) and helps supply drinking water to approximately 600,000 residents across South Al Sharqiyah governorate. It also has an on-site solar farm to support lower-carbon water production.

    The plant entered commercial operation in January 2022 under a build-own-operate arrangement. It is developed by a consortium of Bahwan Engineering and Japan-headquartered JGC Corporation.

    Engineering, procurement and construction (EPC) works were carried out by South Korea's Doosan Heavy Industries & Construction, now known as Doosan Enerbility.

    Oman’s first independent water project (IWP), the Sur IWP, also serves residents in Al-Sharqiyah governorate.

    The main contract for the project was awarded in 2007, with Veolia carrying out EPC works and acting as shareholder in Sharqiyah Desalination Company, which owns the plant.

    Bahwan Veolia Water signed a 22-year operations and maintenance agreement for the project that same year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20631273/main.jpg
    Mark Dowdall
  • Adnoc funnels billions into boosting gas processing

    15 October 2026

     

    Abu Dhabi National Oil Company (Adnoc Group) is accelerating investment in gas processing and associated downstream infrastructure as demand in the UAE rises and the government prioritises lower-carbon energy growth.

    Rising gas consumption in the UAE is being driven by rapid population growth, greater household electrification, expanding industrial bases and demand from gas-intensive downstream segments such as petrochemicals, fertilisers and metals.

    Power generation and water desalination are also key sources of demand, while new industrial zones – as well as data centres supporting the expansion of artificial intelligence (AI) use in the country – add further baseload requirements.

    Adnoc Gas, Adnoc Group’s gas processing subsidiary, is leading the UAE’s push to expand gas processing capacity and is executing a major capital expenditure (capex) programme worth $28bn over 2026-30.

    As part of that capex plan, Adnoc Gas achieved final investment decision (FID) on the second and third phases of its Rich Gas Development (RGD) programme earlier this year.

    Adnoc Gas awarded $8.2bn of engineering, procurement and construction (EPC) contracts for the second and third phases of the RGD programme. These relate to the construction of a new gas processing train at the Habshan complex and a natural gas liquids fractionation train at the Ruwais gas processing facility, respectively.

    Adnoc Gas officially announced the awards, saying it selected China-based Wison Engineering for RGD phase 2 under a $3.9bn contract, while Italy’s Tecnimont was awarded the $4.3bn phase 3 contract.

    Adnoc Gas has also reiterated its $5bn capex for the first phase of the RGD scheme, which is under construction. The company awarded $5bn of engineering, procurement and construction management contracts in three tranches for phase 1 of the RGD programme in June last year, marking the company’s largest-ever capital investment.

    Across all three phases, Adnoc Gas has committed a total of $13.2bn to the RGD programme.

    Bab Gas Cap development

    Looking ahead, Adnoc Gas is advancing towards FID on the estimated $8bn Bab gas cap development. The project will process up to 1.85 billion cubic feet a day (cf/d) of raw feed gas once Adnoc Group begins extracting reserves from four underdeveloped onshore reservoirs at the Bab field: Thammama A, B and H (projected to yield a combined 1.45 billion cf/d) and Thammama F (projected at 396 million cf/d).

    Because existing trains at the Habshan complex cannot accommodate these supplementary volumes, the project entails building a processing plant approximately 170 kilometres from Abu Dhabi city, alongside pipeline networks and ancillary units.

    Adnoc Gas has split the EPC scope into four packages, with technical bids due on 16 November:

    • Package 1: Main Bab gas cap processing plant
    • Package 2: Early civil works
    • Package 3: Pipeline network
    • Package 4: Non-process facilities and associated infrastructure

    Four contractor consortiums prequalified to bid for the main contracts:

    • Larsen & Toubro Energy Hydrocarbon (India) / Samsung E&A (South Korea)
    • Saipem (Italy) / NMDC Energy (UAE)
    • Technip Energies (France) / JGC Corporation (Japan) / Sinopec (China)
    • Tecnimont (Italy) / China Petroleum Engineering & Construction Corporation 

    Gas pipeline investments

    Adnoc Group continues to invest in projects to enhance its gas transmission networks across the UAE, following its $3.5bn-plus capex on the Estidama programme earlier this decade to expand its sales-gas network in the country.

    Adnoc Gas recently awarded the main contract for a project to build a new pipeline that will supply gas from the Habshan scraper launcher station at its Habshan gas compression complex in Abu Dhabi to the Al-Nouf customer receiving station, for delivery to Emirates Water & Electricity Company (Ewec).

    The proposed 56-inch, 127km pipeline will help the UAE’s state utility, Ewec, meet additional gas demand to power the second phase of an AI data centre in Abu Dhabi, as well as support the relocation of some of its key assets in the Mirfa area of the emirate.

    Adnoc Gas awarded the EPC contract for the project to India-based Kalpataru Projects International.

    Separately, Adnoc is moving ahead with plans to build an oil pipeline network that will transport crude from its main offshore oil processing islands in the Gulf to its onshore crude export terminal at Jebel Dhanna, Abu Dhabi.

    The planned network will source crude from Zirku Island and Das Island, where Adnoc gathers and treats oil produced at Abu Dhabi’s offshore fields, among other processing hubs, and transport it about 300km inland to the Jebel Dhanna terminal.

    The proposed pipelines will eventually connect to the West-East crude pipeline network currently being built from Jebel Dhanna to the emirate of Fujairah, which is expected to be commissioned in 2027.

    Boosting chemicals output

    Meanwhile, following major investments over the past three years to set up specialty chemical plants under the first phase of its chemical derivatives complex in Ruwais Industrial City, Taziz is firming up plans for the second phase of the complex.

    Taziz has partnered with local conglomerate Alpha Dhabi to undertake a joint feasibility and market study and, subject to FIDs and regulatory approvals, the second phase of the Taziz Industrial Chemicals Zone could produce up to 14 new chemicals, with total output capacity of about 2.2 million tonnes a year (t/y).

    The chemicals under study include styrene and polystyrene, acrylic acid and derivatives, polyols, methylene diphenyl diisocyanate (MDI), epoxy resins and linear alpha-olefins. These are widely used across construction, automotive, packaging, consumer goods, infrastructure and advanced manufacturing.

    Taziz, Germany-based chemicals producer Covestro and XRG – all wholly or majority-owned subsidiaries of Adnoc Group –  have launched a joint feasibility study to assess the development of a world-scale MDI plant in Ruwais Industrial City.

    The partners aim to establish a facility in the Taziz Industrial Chemicals Zone with a production capacity of 660,000 t/y of MDI. The study will evaluate the technical, commercial and economic feasibility of the proposed plant, with the aim of informing a future investment decision.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20622502/main.gif
    Indrajit Sen
  • Morocco extends deadline for El-Menzel pumped-storage plant

    15 October 2026

    Morocco’s Office National de l’Electricite (One) has extended the deadline for contractors to submit bids for the 362MW El-Menzel pumped-storage hydropower project.

    The new deadline is 25 November. Bids were previously due on 28 October.

    The project is located about 35 kilometres southeast of Sefrou in the Fes-Meknes region. The engineering, procurement and construction contract covers engineering, equipment supply, construction, installation and commissioning.

    The scope includes two reversible pump-turbine units, upper and lower reservoirs, underground water conduits, a 400kV substation and a transmission line connecting the facility to the national grid.

    One tendered the project in July following an earlier prequalification process that began in May 2023, when six consortiums submitted applications.

    Three consortiums were subsequently prequalified to bid for the main contract. These include:

    • China International Water & Electric Corporation (China) / Yellow River Engineering Consulting Company (China) / Harbin Electric International Company (China) / Harbin Electric Machinery Company (China) / Jet Contractors (Morocco)
    • Sinohydro (China) / Andritz Hydro (Austria)
    • Webuild (Italy) / Dongfang Electric International Corporation (China)

    The project aims to support Morocco’s renewable energy programme and help the country reach its target of sourcing 52% of its energy mix from renewables by 2030. It is being financed by the African Development Bank and Germany’s KfW Development Bank.

    One already operates the 464MW Afourer and 350MW Abdelmoumen pumped-storage stations, while the 300MW Ifahsa project is under development.

    In August, the Office National de l’Electricite et de l’Eau Potable (Onee) approved a MD248bn ($26.4bn) investment programme for 2026-30. The spending plan covers electricity and drinking water infrastructure.

    The programme allocates $21.9bn to electricity projects and $4.5bn to drinking water infrastructure. According to Onee, the private sector will finance about 72% of the investment.

    The electricity programme includes $11.1bn of investment to develop 11.6GW of renewable energy capacity and 2.6GW of energy storage. It also provides for 2,230MWh of battery energy storage systems, the El-Menzel pumped-storage hydropower plant and 3,744MW of gas-fired generation to support grid flexibility.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20621738/main.jpg
    Mark Dowdall
  • Contractors given extension on Riyadh airport aviation complex

    15 October 2026

     

    Contractors have been given an extension until 19 November to submit proposals for an estimated SR3bn ($817m) contract to build an aviation complex within the King Salman International airport master development in Riyadh.

    Government-owned aviation organisation Saudi Royal Aviation (SRA) tendered the contract in August, with an initial bid submission deadline of 8 October.

    Phase one of the programme comprised the concept design stage, which the design consultant has completed.

    SRA is now seeking to deliver the second phase, which covers design development, detailed design, procurement, construction, testing, commissioning and close-out of the works.

    The scope covers 30 landside buildings, including 16 screening areas and gates, plus 15 airside buildings, including four gates.

    The assets include maintenance hangars, workshops, office and administrative buildings (including interior fit-out), warehouses, storage, security and catering facilities, aprons and access roads, and site utilities and civil works.

    King Salman International airport will provide primary utilities to designated tie-in points, with the contractor taking responsibility from there.

    Although the site is within King Salman International airport’s boundaries, it is classified as landside and is a greenfield development. The contractor must therefore meet airport security, safety and access requirements, in addition to SRA’s own clearance processes.

    Project scale

    The King Salman International airport project covers an area of about 57 square kilometres (sq km), allowing for six parallel runways, and will include the existing terminals at King Khalid International airport. It will also include 12 sq km of airport support facilities, residential and recreational facilities, retail outlets and other logistics real estate.

    The airport aims to accommodate up to 100 million passengers by 2030. The goal for cargo is to process 2 million tonnes a year by 2030.

    Saudi Arabia plans to invest significantly in its aviation sector. The Saudi Aviation Strategy, announced by the General Authority of Civil Aviation, aims to triple Saudi Arabia’s annual passenger traffic to 330 million travellers by 2030.

    It also aims to increase air cargo traffic to 4.5 million tonnes and raise the country’s total air connections to more than 250 destinations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20619953/main.png
    Yasir Iqbal
  • KBR wins Aramco offshore engineering services contract

    15 October 2026

    Register for MEED’s 14-day trial access 

    Saudi Aramco has awarded US-headquartered KBR a contract to provide engineering services to support facility upgrades across the Marjan offshore field in Gulf waters.

    Under the contract, awarded under Aramco’s existing general engineering services-plus (GES+) agreement with KBR, the US firm will provide engineering and project execution services to support key offshore processing, gas compression and power infrastructure facilities within the Marjan field.

    The project is expected to help maintain the Marjan field’s production capacity in line with recent field developments, KBR said in a statement.

    It is also expected to advance associated gas processing capabilities and strengthen the long-term performance of critical offshore assets through the integration of digital technologies, automation and power system enhancements, the Houston-based company added.

    KBR’s engineering services will specifically target upgrades to gas-oil separation plants (GOSPs) 2 and 3 at the Marjan offshore oil field development, a source told MEED.

    KBR is expected to execute the engineering work primarily from its offices in Houston and Al-Khobar.

    The Marjan offshore oil field, on Saudi Arabia’s eastern coast, was discovered in 1967 and began production in 1973.

    In 2019, Aramco committed an estimated $15bn in capital expenditure for a major infrastructure upgrade at the field under the Marjan increment programme. The project aims to increase the field’s oil production capacity by 300,000 barrels a day (b/d) of Arabian Medium crude oil to 800,000 b/d, process 2.5 billion cubic feet a day of gas, and produce an additional 360,000 b/d of ethane and natural gas liquids.

    The Marjan increment programme consists of about 20 engineering, procurement and construction (EPC) packages. The scope of work mainly involves a new GOSP and 24 offshore oil, gas and water-injection platforms.

    Since launching the Marjan increment programme, the Saudi energy giant has continued investing billions to maintain and upgrade infrastructure at the Marjan field.

    Aramco also plans to maintain steady capex in the future to sustain oil and gas production at the Marjan field development over the long term.

    ALSO READ: Consortium wins Safaniya field onshore facilities project

    MEED’s October 2026 report on Saudi Arabia includes:

    > COMMENT: Saudi projects hold steady
    > GOVERNMENT: Riyadh looks to reset its regional defence outlook
    > ECONOMY: Conflict bolsters case for Saudi economic diversification
    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
    > POWER: Saudi Arabia’s power award activity slows
    > WATER: Saudi water sector hits sharp slowdown
    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
    > DATABANK: Saudi data indicates project spending shift

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20621733/main.jpg
    Indrajit Sen