Sign in
Saudi accounted for the lion’s share of total awarded contracts in the GCC during 2Q 2024, with the value of projects awarded here amounting to 60% of total awarded contracts in the Gulf during the period, according to a report (pdf) by Kamco Invest. The value of project awards in Saudi grew 9.9% y-o-y to USD 30.6 mn in 2Q 2024 despite lower oil production and forecasts of slower economic growth this year, according to the report.
The growth comes on the back of an acceleration of project awards at Neom as officials remain steadfast that progress on the buildout of the city was proceeding on schedule. It was also driven by Aramco’s recent awarding of over USD 25 bn in contracts for the development of the second phase of its Jafurah gas field and the expansion of the Kingdom’s primary natural gas pipeline. The contracts come under Aramco’s plan to see natural gas production in 2030 be 60% higher than it was in 2021.
BACKGROUND- Officials lately hammered the idea of preventing the economy from overheating on the back of its economic diversification push. Some have taken to calling gigaprojects modular and Neom has gone on a drive to underscore to contractors and bankers that everything is on track.
Oil projects still led the way: The value of oil projects awarded by Saudi during the quarter skyrocketed to USD 8.5 bn, up from USD 10 mn during the same quarter a year earlier. Saudi also awarded a separate USD 8.5 bn in energy projects during the period — up 25% y-o-y.
But some sectors saw a decline: The value of construction projects awarded by the Kingdom was down 4.5% y-o-y in 2Q to USD 5 bn.
Key highlights: Some of the quarter’s leading project awards include a USD 2 bn project awarded by the Royal Commission for Riyadh City to build 50 km of highways in the capital, according to the report. It also took note of USD 1.5 bn order to Siemens Energy for two power plants — Taiba 2 and Qassim 2. The two power plants — set to be built in the western and central regions in the Kingdom — will be two of the world’s largest and most-advanced combined-cycle power plants.
How the GCC did: The value of GCC project awards were down 19.7% y-o-y during 2Q 2024 to USD 51.7 bn on the back of an “unprecedented decline” in Qatar and a sharp decline in the UAE, according to the report. َDoha’s project awards fell 98.5% y-o-y during the period to USD 162 mn from USD 10.5 bn a year earlier, while Abu Dhabi was down 23.6% y-o-y to USD 16.3 bn.
