Gulf’s Project Outlook

 

The Gulf project market expanded during the first half of the year despite global economic challenges such as the financial sector turmoil, elevated inflation, and the ongoing Ukraine-Russia conflict.

 

Most GCC markets are forecast to show growth in terms of the value of contracts, with Saudi Arabia and the UAE leading the pack with an estimated 20% year-on-year rise.

 

More than $1.4 trillion worth of projects are in the pipeline in the GCC, much of which will be awarded in 2023.

 

The Saudi giga projects market alone has more than $750 billion worth of contracts in the pipeline. NEOM, the $500 billion project by Saudi Arabia’s PIF, and oil and gas projects led by Saudi Aramco, feature in the list.

 

The GCC nations aim to invest over $350 billion-plus in upstream and downstream schemes to increase production capacity and diversify into new generation of petrochemical projects to maximize value of the hydrocarbons chain.

 

Major investments have been planned in Qatar. The largest contract for this year is valued at $6 billion for two production units at Qatargas’ North Field South liquefied natural gas expansion scheme. The North Field project with six LNG trains is expected to increase its LNG capacity from 77 million tonnes per annum to 126 million tonnes per annum by 2027. The International Monetary Fund (IMF) predicts that Qatar's medium-term growth will rise to around 4-4.5% after the expansion of the North Field boosts LNG production.

 

New policy focus is on conserving hydrocarbons reserves and on reducing greenhouse gas (GHG) emissions. Adoption of digital technologies and in-country value requirements are gaining prominence in oil and gas projects.

 

The region sees growing trends in the power and water sector too as it shifts towards clean energy projects. The Gulf nations have announced new targets and have renewed their commitment to the Paris Agreement in the past two years. UAE targets 44% renewable energy by 2050, while Saudi Arabia is aiming for 50% by 2030.

 

Driven by the goal of improving efficiency, various interconnection projects within the GCC states, and with neighbouring countries such as Egypt, Jordan and Iraq have made notable progress.

 

This broader regional grid system not only provides widespread availability of electricity to communities and the cost-effective integration of variable renewable generation, but also reduces the need for additional power generation and subsequently decreases carbon emissions.

 

Pallavi Agrawal

Editor

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