Project contract awards in power sector up 21 per cent year-on-year for first six months of 2014
The value of project contract awards in the GCC power sector for the first half of 2014 were up 21 per cent on the same period in 2013.
For the first six months of 2014, $6.7bn worth of major contracts were awarded in the GCCs power sector, compared to $5.3bn for the first half of 2013, according to data from MEED and regional projects tracker MEED Projects.
The $6.7bn worth of contracts was also significantly higher than the $5.9bn and $3.5bn worth of deals awarded for the first six months of 2012 and 2011 respectively.
By far the largest contract awarded in 2014 to date was the estimated $2bn contract awarded to Chinas Shandong Electric Power Construction Corporation (Sepco) for the power plant package at its planned integrated gasification combined-cycle (IGCC) power project at Jizan Economic City (JEC) in the southwest of Saudi Arabia.
As a result, Saudi Arabia accounted for the majority of power contracts awarded in 2014, some 63 per cent of the total contracts awarded in GCC, a total of $4.2bn worth of deals.
Another large contract awarded in the kingdoms power sector in 2014 was the estimated $300m contract awarded to Sepco to convert the existing power plant at Saudi Aramcos Shaybah oil development into a combined-cycle facility.
Aramco has been a major client in the kingdoms power sector in 2014 to date, also having awarded an estimated $300m deal to Indias Larsen & Toubro (L&T) to build an overhead transmission line and underground cabling to upgrade the existing power system at its Abu Ali power plants north of Jubail.
Kuwait has been the second most active power sector in 2014, with $800m worth of contracts having been awarded in the first six months of the year. These include an estimated $260m contract to upgrade an existing power plant and a number of substation upgrade contracts.
Kuwait is also set to have a strong second half of 2014, with a number of contracts approved in the first half of the year that should be signed before the end of the year. These include the approval of the $493m contract to Spains Cobra to build the planned 50MW concentrated solar power (CSP) plant for Kuwait Institute for Scientific Research (Kisr).
Qatar was the third most active GCC power market, with $780m worth of contracts awarded for the first half of 2014. The majority of these were for phase 11 of the Qatar General Electricity & Water Corporations (Kahramaas) transmission system expansion plan.This brings the total value of contracts awarded for phase 11 of the programme to $2.1bn.
About $450m worth of power sector project deals were signed in the UAE for the first half of 2014. The largest of which was the $175m deal awarded to Switzerlands ABB to boost the power generation capacity at Abu Dhabis Zirku oil and gas processing facilities.
Investment in the GCCs power sector is set to remain high for the rest of 2014 and beyond, with it estimated that installed capacity in the GCC will have to rise by almost 172GW to reach 333GW by 2020, more than double the current installed capacity of 161GW.