What to Expect in 2018
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Business Outlook PROJECTS that a combination of oil prices above MEED Projects $60 a barrel, government reforms and Oman gains as others MEED’s GCC Projects What to expect in 2018 more bullish capital expenditure budgets Forecast and Review report will help you an- will result in a better year ahead. lose or remain stagnant alyse the GCC projects Following the subdued project activity of 206 and 207, An analysis of recent developments market’s performance for supports this view. Under bid evaluation man is the only of $800m-worth of the next fi ve years. isit the outloo for the year ahead provides cause for optimism the Reports section on since late 2016, Dubai’s $865m Warsan country that projects, including the www.meed.com waste-to-energy plant was finally awarded Ogained on the $700m first phase of the in January, as was the first deal in Saudi Gulf Projects Index in Basmaya power plant. ood things come to those time being the $1.8bn Bab integrated Arabia’s renewable energy programme. the week ending 9 Feb- Iran, Bahrain and who wait, or so the saying facilities and the estimated $1.7bn Man- Hopes are also high that an award is ruary, on account of the the UAE also shed goes. For the winning joint dous underground crude storage deals. imminent on the Zayed National Museum revival of the $1.2bn 0.4 per cent on the venture contractors on Abu This is despite the large number of on Saadiyat Island, under bid evaluation Sur urea plant debottle- index, 0.3 per cent Dhabi National il Com- stagnant projects in the pipeline, in- for more than four years, as well as on necking facility owned and 0.1 per cent, Gpany’s Crude Flexibility Project (CFP) cluding the $1bn-plus third phase of the the $1bn-plus Al-Jahra ministerial com- by Oman India Fertiliser respectively. Kuwait, at its uwais refi nery, this was certainly inter-refi neries project at uwais, phase plex and Kazema National Guard camp in Company. However, Qatar and Saudi Arabia, the case. Almost three years after the two of the usahwira fi eld development Kuwait, both of which have been on the Oman’s 0.7 per cent meanwhile, all re- engineering, procurement and construc- and the second stage of the integrated drawing board for more than five years. gain was unable to keep mained stagnant. tion tender was originally released, and gas development at abshan all of the index from regis- Two plants in Iran 10 months on from the submission of which have been tendered, cancelled and Backlog of projects tering an overall loss of were put on hold or fi nal commercial bids, the team of Sam- then retendered in the past three years. One of the unanticipated benefits of the 0.1 per cent. cancelled, while no sung Engineering and CB&I received The award of the long-awaited CFP has projects slump since 2016 has been the Iraq registered the major new projects were the $3.1bn order in early February. raised hopes that it could mark the fi rst growth in the backlog of awaited projects. biggest loss of the eight recorded for Bahrain or Notable for its sie and scope, the in a series of contract awards in 2018, Today, there are more than 570 individual countries at 0.9 per the UAE, save for the contract was also important from the especially now that higher oil prices have projects worth more than $77bn under cent. This is due to $100m second phase of perspective of the Abu Dhabi oil and gas improved the emirate’s fi scal position. commercial bid evaluation in the region, the putting on hold of Bateen al-Samar, part of industry. It has been a lean two years for These raised hopes are not confi ned and more than $109bn if this is extended the Samawah refinery, the Sheikh Zayed Hous- the local market since lower oil prices to the Abu Dhabi hydrocarbons sector. to contracts tendered, almost the same as budget at $2bn by the ing Programme in the took hold in the region, with the only Across the region, contractors, consult- the value of deals let in 2017 as a whole. Oil Ministry, due to a northern UAE emirate of signifi cant contracts awarded in that ants and suppliers alike will be hoping For 2018 to improve on the previ- lack of progress – as Ras al-Khaimah. ous two years, the taps will have to well as the completion Jennifer Aguinaldo TOP GCC PROJECTS UNDER BID EVALUATION be opened on this backlog. Although bidding contractors have been compliant Project Country Value ($m) in extending their bid bonds year after GULF PROJECTS INDEX Mecca Metro: phase 1 (Lines B, C): part 1: package 3 Saudi Arabia 3,547 year on delayed tenders, there is no Value of projects planned or under way ($bn) Mecca Metro: phase 1 (Lines B, C): part 1: civil: package 1 Saudi Arabia 2,653 guarantee they will continue to do so. If 1,600 Ras Markaz crude storage terminal: phase 1 Oman 1,756 they do not, clients may find themselves 1,400 Al-Jahra ministerial complex Kuwait 1,200 retendering projects, losing both time 1,200 1,000 Kuwait National Guard: Kazema camp project Kuwait 1,000 and money, just as they are given the 800 Ammonia plant in Ras al-Khair Saudi Arabia 1,000 green light to go ahead. 600 400 Dubai Creek Harbour: Dubai Creek Tower UAE 1,000 Equally uncertain is how the market will cope with another year of sluggish 200 Doha Metro: phase 1A Green Line extension Qatar 1,000 0 project spending. Outside of Dubai, the Mecca Metro: phase 1 (Lines B, C): part 1: civil: package 2 Saudi Arabia 949 majority of GCC firms are at breaking Dec 2011 Amiri Diwan: New Palace of Justice Kuwait 800 Dec 2005Dec 2006Dec 2007Dec 2008Dec 2009Dec 2010 Dec 2012Dec 2013Dec 2014Dec 2015Dec 2016 point having faced a squeeze on their 9 Feb 2018 Duqm power and desalination plant Oman 800 order books and cashflow as work has UAE Iraq Qatar Oman Regional road south part project: central section Kuwait 750 dried up. For further contraction of the Saudi Arabia Iran Kuwait Bahrain Saadiyat Island: Guggenheim Abu Dhabi Museum UAE 680 market to be avoided, the industry has Source: MEED Projects Yas Island: Water’s Edge UAE 653 to keep pushing governments to move Read updates through the month on: Saudi-Egypt power interconnection: Madina Tabuk Aqaba transmission line Saudi Arabia 650 ahead with their project programmes. www.meed.com/gulf-projects-index Source: MEED Projects Ed James 78 \ MEED Business Review MEED Business Review / 79 78-79 Projects.indd 78 2/15/18 6:18 PM 78-79 Projects.indd 79 2/15/18 6:18 PM that a combination of oil prices above $60 a barrel, government reforms and Oman gains as others more bullish capital expenditure budgets will result in a better year ahead. lose or remain stagnant An analysis of recent developments supports this view. Under bid evaluation man is the only of $800m-worth of since late 2016, Dubai’s $865m Warsan country that projects, including the waste-to-energy plant was finally awarded Ogained on the $700m first phase of the in January, as was the first deal in Saudi Gulf Projects Index in Basmaya power plant. Arabia’s renewable energy programme. the week ending 9 Feb- Iran, Bahrain and Hopes are also high that an award is ruary, on account of the the UAE also shed imminent on the Zayed National Museum revival of the $1.2bn 0.4 per cent on the on Saadiyat Island, under bid evaluation Sur urea plant debottle- index, 0.3 per cent for more than four years, as well as on necking facility owned and 0.1 per cent, the $1bn-plus Al-Jahra ministerial com- by Oman India Fertiliser respectively. Kuwait, plex and Kazema National Guard camp in Company. However, Qatar and Saudi Arabia, Kuwait, both of which have been on the Oman’s 0.7 per cent meanwhile, all re- drawing board for more than five years. gain was unable to keep mained stagnant. the index from regis- Two plants in Iran Backlog of projects tering an overall loss of were put on hold or One of the unanticipated benefits of the 0.1 per cent. cancelled, while no projects slump since 2016 has been the Iraq registered the major new projects were growth in the backlog of awaited projects. biggest loss of the eight recorded for Bahrain or Today, there are more than 570 individual countries at 0.9 per the UAE, save for the projects worth more than $77bn under cent. This is due to $100m second phase of commercial bid evaluation in the region, the putting on hold of Bateen al-Samar, part of and more than $109bn if this is extended the Samawah refinery, the Sheikh Zayed Hous- to contracts tendered, almost the same as budget at $2bn by the ing Programme in the the value of deals let in 2017 as a whole. Oil Ministry, due to a northern UAE emirate of For 2018 to improve on the previ- lack of progress – as Ras al-Khaimah. ous two years, the taps will have to well as the completion Jennifer Aguinaldo be opened on this backlog. Although bidding contractors have been compliant in extending their bid bonds year after GULF PROJECTS INDEX year on delayed tenders, there is no Value of projects planned or under way ($bn) guarantee they will continue to do so.