To advertise on this website,
please write to
utme@itp.com

Home / Spending Trends


Spending Trends

by Adam Lane on Jan 6, 2013


Renewable energy plans received the largest volume of project announcement through the first eight months of 2012. (GETTY IMAGES)
Renewable energy plans received the largest volume of project announcement through the first eight months of 2012. (GETTY IMAGES)

Kalpesh Ramwani explains the emerging trends in the GCC energy project landscape

As the GCC Energy market picks up steam with major announcements by governments and project owners, we explore the trends that shaped the industry in the first eight months of 2012.

Between January and August 2012, US$ 125bn worth of new projects were announced in the GCC while US$ 57bn worth of projects were awarded (Figure 1). Saudi Arabia and the UAE combined accounted for c.81% and c.83% of all the new announcements and project awards made in the year respectively.

Within Saudi Arabia and the UAE, the sectors of oil and gas production and petrochemicals accounted for over c.50% of all project awards in 2012.

Kuwait on the other hand saw 63% of its awards made in the power generation sector. The largest project awarded in 2012 was the US$ 3bn Jazan Power and Desalination Plant in Jazan, Saudi Arabia.

Looking deeper into the projects announced in the two dominating markets, we notice that Saudi Arabia has primarily (c.46%) focused on projects within the oil & gas production sector while the UAE has announced the majority (c.80%) of its projects within the alternative energy sector.

The largest project announced in Saudi Arabia was Saudi Aramco’s US$ 25bn Red Sea Off-Shore Development Project, whilst the US$ 35bn Solar Park announced by DEWA (Dubai Electricity and Water Authority) was the largest project announced in the UAE in the first eight months of 2012.

Most of the new projects announced in 2012 are in line with the long-term plans that the GCC governments have set for themselves.

A closer look at the award dates of the announced projects reveals that only c.30% of the announced projects are likely to be awarded in either 2012 or 2013, while most of the large scale projects are expected begin development in the next 3-4 years.

A sector wise breakdown of announced projects shows that alternative energy, followed by oil & gas production and power will account for 70% of all projects (Figure 2).

While the oil and gas production sector and power have historically been the focus sectors within the GCC, alternative energy has gained prominence within the region over the last few years.

Secondary sectors that will see a fair share of investments in the coming years include: metals and water and waste, which account for 7% and 5% of announced projects respectively.

As commodity prices increase world over, GCC countries have started investing in mining activities in order to source metals locally while investments in waste and water facilities is part of the GCC’s broader strategy to combat water shortages and provide safe drinking water in an energy efficient way to its ever increasing population.

A comparison of projects announced and projects awarded shows that while projects within alternative energy account for the largest share (c.34%) of the announced projects, the sector accounts for only c.5% of the projects awarded in 2012. Projects within the oil and gas production and petrochemicals sectors account for c.51% of all awarded projects, followed by power at c.17%.

Article continues on next page ...


FEATURED COMMENT

Please click here to comment on this article

COMMENTS

Name *
Email *
City
Country
Subject: *
Comments: *
Math Question: *
Solve this simple math problem
and enter the result. E.g. for 1+3, enter 4.
Refresh the image if not clear
Remember me on this computer



LinkedIn
Arabian Oil and Gas Middle East
Construction Week Online Middle East
Hotelier Middle East
Digital Production Middle East
Arabian Supply Chain Middle East
Construction Week - India
Hotelier India



RELATED ARTICLES


NEWSLETTER SUBSCRIPTION
Email::

Official middle east partner to:



Power And Water logo
Articles
Companies