Saudi Arabia’s hydrocarbons project market has had its quietest year since 2007, with only $3.9bn-worth of projects being awarded in 2013, according to regional projects tracker MEED Projects.  

The figure is almost $17bn lower than that of 2012 and more than $22bn below that of 2011, as the industry goes through a consolidation period due to the sheer amount of active schemes across the kingdom.

The highest-value project awarded during the past 12 months was the Riyadh refinery upgrade, which was awarded to South Korea’s Samsung Engineering in February. The second-largest was the Saudi Basic Industries Corporation’s (Sabic’s) $400m polyacetal plant, won by Spain’s Intecsa Industrial in July.

The past 12 months have been characterised by two world-scale schemes that were expected to be awarded, but both are still in the evaluation phase as of late December 2013.

The largest is Saudi Aramco’s planned gasification project at Jizan, in the southwest of the kingdom. MEED reported in mid-November that the costs had risen to about $10bn, from an initial budget estimate of $3bn-$5bn, and that this had forced Aramco to take longer than usual to assess what options it has regarding the scheme.

There is hope a solution can be found in the first quarter, but it is likely a cheaper alternative to the current scope of works will be sought.

The other project is Aramco’s planned expansion to its 500,000 barrel-a-day Ras Tanura refinery, which is also still being evaluated by the state-owned oil company.

MEED reported in November that Japan’s JGC Corporation and South Korea’s Daewoo Engineering & Construction emerged as the frontrunners to be awarded the two main process packages for the scheme. However, that has yet to be awarded.

The lack of activity in Saudi Arabia has led to many international contractors looking elsewhere within the GCC for work. Huge downstream schemes in Qatar and Kuwait are expected to be awarded in 2014, while several high-value upstream contracts being awarded in Abu Dhabi in early 2013 have made up for the shortfall in the kingdom. However, contractors are still worried that 2014 could be another lean year in the region’s largest market.

If the gasification job goes ahead and Ras Tanura is also awarded then that will be a positive start to 2014. MEED projects states that there are over $27bn worth of hydrocarbons projects at various pre-execution phases in Saudi Arabia with $10bn of those at the design or main contract tender stage.