Dubais announcement of the main award on its Jebel Ali refinery expansion has come amid a drought of spending in the GCC downstream sector.
The state-owned Emirates National Oil Company (Enoc) announced on 19 September that it had awarded the main contract on its $1bn-plus project to Frances Technip, confirming a MEED report in August.
However, the deal represents the only major contract in the GCC refining sector in 2016 as raft of projects have become delayed at the pre-execution phase.
The last two years were bumper years for GCC refining spending as Kuwait handed out long-awaited contract on its Clean Fuels Project and new Al-Zour refinery. MEED Projects estimates that $12.3bn and $9.2bn worth of contracts were awarded in 2014 and 2015 respectively.
But contractors are awaiting the go-ahead on several other refining schemes planned in the six-country bloc, where downstream spending has dried up in the first eight months of 2016.
No decision has been made on to award the two main packages on the International Petroleum Investment Companys (Ipic) new refinery project in Fujairah, UAE, since commercial bids were submitted in March 2015.
Elsewhere in the UAE, contractors are still waiting for an award on the estimated $3bn project upgrade Abu Dhabis Ruwais refining operations to handle additional offshore crude. Commercial bids were submitted in December 2015 for the project, with South Koreas GS Engineering & Construction understood to be the lowest bidder.
Bids are expected to be submitted for the Bahrain refinery expansion on 5 October with the project on track to be awarded in 2017. Meanwhile, the bid deadline on the new refinery in Duqm, Oman, has been extended to November. In Saudi Arabia, bids are being assessed for the two packages on the clean fuels project at the Ras Tanura refinery.
It is unclear whether delays in downstream projects in the region are linked to the fall in oil prices since the second half of 2014. While projects such as the Dubai refinery expansion are based on meeting domestic demand, others such as Fujairah and Duqm are aimed at export markets.
Due to the size and scale of building new refineries and expanding existing operations, uncertainty in the outlook for crude prices could impact the timing of the final investment decisions for many projects in the GCC.