The cancellation of the $6.4bn Al-Karaana petrochemicals complex saw Qatar register a decline of 2.1 per cent. This is Qatar’s worst performance since October last year and makes it the biggest decliner on the Gulf Projects Index in the week ending on 16 January.

Al-Karaana was a joint venture of UK/Dutch Shell Group and state-owned Qatar Petroleum (QP), and would have included a mixed-feed steam cracker with a capacity of 1.1 million  tonnes a year (t/y) of ethylene and 170,000 t/y of propylene.

Shell and QP announced they were scrapping the scheme on 14 January citing concerns about commercial feasibility amid lower oil prices. The termination of Al-Karaana comes after the scrapping of Al-Sejeel in September, a similar petrochemicals complex planned for Qatar that had a price tag of $7.4bn.

The cancellation of the two projects has exacerbated fears that more projects could be scrapped or put on hold as the Gulf’s oil exporters cut back on spending.

Elsewhere in the Gulf, Saudi Arabia, the UAE, Bahrain, Iran and Iraq all saw solid growth in their project markets, helping to propel the Gulf index to a 0.7 per cent expansion, its best performance since November.

Saudi Arabia, the Gulf’s biggest project market, saw 21 new projects announced, helping it expand by 0.5 per cent as it added $6.3bn to its project market.

The UAE’s projects market rose by 0.8 per cent as it added $6.6bn to its project market. A total of 49 new projects were announced over the week, mainly comprising commercial and residential construction schemes.

Bahrain saw the biggest jump of the week, up 4.7 per cent due to the announcement of 84 new projects.