Iraq pipeline upgrade boosts market

17 May 2011

The GCC projects market is showing further signs of stabilising

Contract awards this week

Biggest contract $163m: Awarded to China Petroleum Engineering Construction Company for oil and gas production facilities at the Halfaya oil field in the Missan province of southern Iraq

$300m: Value of major contract awards

2: Number of contracts awarded

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The total value of projects planned or under way in the region increased 2.4 per cent to $2.58 trillion for the week up until 17 May, the highest it has been since anti-government protests began in the middle of January.

The value of the index is now above the $2.57 trillion registered on 19 January.

The reason for the growth is the 15.5 per cent jump recorded in the Iraq projects market.

The main reason for the sharp rise in Iraq’s projects market was the announcement of a $50bn oil and gas pipeline rehabilitation programme.

In addition to this scheme, $1.6bn of new infrastructure projects were announced in Iraq and the budget value for the Karbala refinery project was increased by $3bn.

Iraq’s strong performance cements its position as the region’s fastest growing projects market, with a 36.6 per cent year-on-year increase.

The GCC projects market, which accounts for about 72 per cent of the Gulf’s total market, is showing some further signs of stabilising, strengthening by 0.6 per cent this week.

This was mainly due to the 1.2 per cent growth in Saudi Arabia’s projects index.

The kingdom’s projects market saw its value increase by $7.6bn as the $10bn Al-Uqair tourism project was revived and a $2.5bn contract was signed to expand the grand mosque in Mecca.

The UAE was the GCC’s second best performing market as its index grew by 0.3 per cent after construction projects worth a total of $130m and a $136m electrical grid station project were added to the index.

Meanwhile, Iran recorded the biggest drop in the value of projects after a $6bn offshore development was completed.

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