The value of construction contract awards in the GCC power sector fell 27 per cent in 2012, with the value of deals falling to $12.8bn, from the $17.5bn awarded in 2011. However, the market is expected to pick up in 2013, with close to $105bn-worth of schemes currently in various stages of the planning and bidding phases.
Despite a 13 per cent year-on-year drop in power contract awards in 2012, Saudi Arabia remains the GCC’s largest power market with $9.6bn-worth of contracts awarded.
The biggest contract award was the $3.2bn deal awarded to South Korea’s Hyundai Heavy Industries (HHI) to build the Jeddah South thermal power plant, which will have a total capacity of 2,400MW.
Other major power contract awards in the kingdom include the $1.3bn deal to the local Saudi Arabian Bemco to build the Riyadh PP12 combined-cycle power plant and the $1.5bn awarded to a consortium led by South Korea’s Samsung Engineering to build the Yanbu 3 power plant. The kingdom is set to remain the GCC’s key power market in 2013, with almost $60bn-worth of power schemes at various stages of the planning and bidding stages.
Kuwait was the second most lucrative power market in 2012, with $1.7bn-worth of construction contracts awarded. However, this was a 35 per cent drop on the $2.6bn-worth of contracts awarded in 2011. The biggest contract award was a $380m elevated substation deal awarded by the Kuwait Oil Company (KOC).
Kuwait’s power market was boosted by the long-awaited award of the Al-Zour North scheme, Kuwait’s first independent water and power project (IWPP). A consortium of UK/French GDF Suez International, Japan’s Sumitomo and Kuwait’s AH Sagar & Brothers Group won the contract to build the project, which will have a power capacity of 1,500MW.
Qatar awarded $0.8bn-worth of contract awards in 2012, a 13 per cent growth on the $0.7bn awarded the previous year. The largest contract award was an estimated $500m deal to build a subsea power cable project for Qatar Petroleum.
Qatar is set to sharply increase investment in its power sector over the next five years as it pushes ahead with its World Cup infrastructure programme. Qatar Electricity & Water Corporation (Kahramaa) is planning to invest $22bn until 2017 to boost the emirate’s electricity and water capacity.
Almost $0.4bn worth of power construction awards were made in the UAE in 2012, a 73 per cent decline on the $1.5bn made the previous year. The biggest award was the $109m deal awarded for a substation at Shamkha by the Abu Dhabi Transmission & Despatch Company (Transco).
Oman recorded the biggest drop in the value of its power projects market in 2012, with the value of contract awards falling to $0.3bn from $1.7bn in 2011, a decline of 82 per cent. However, the sultanate is expected to push forward with several power schemes in the next five years. In February, Oman Power & Water Procurement (OPWP) company has received prequalification entries from eight companies for the contract to develop the Salalah 2 independent power project (IPP) project.