2010 news in brief
Qatar Liquefied Gas Company (Qatargas) is to hold negotiations with three international engineering firms over a $1bn-plus deal at the company’s Ras Laffan production facilities in late January. Four international consortiums submitted bids for the plateau maintenance project on 25 October 2009. Qatargas plans to try to cut the price of their bids and agree on the scope of the liquefied natural gas (LNG) project. The bidding groups were France’s Technip and Japan’s Chiyoda Corporation; JGC with South Korea’s GS Engineering & Construction; Italy’s Saipem; and Japan’s Toyo Engineering Corporation in a consortium with South Korea’s Hyundai Engineering & Construction.
Baghdad is on the verge of awarding a major contract to help it plan the overhaul of the country’s energy industry, with US consultant Booz & Company the frontrunner to win the deal. The project, known as the Integrated National Energy Strategy Technical Assistance (Inesta) scheme, will be a major step towards creating long-term plans for the development of the country’s oil and gas, power and general energy sectors, according to sources with knowledge of the project. The estimated $5m study is being paid for by the Washington-headquartered World Bank, which also helped Baghdad tender the consultancy deal.
Saudi investment firm Kingdom Holding has selected US-based Adrian Smith & Gordon Gill Architecture as the architect of the 1-kilometre tall Jeddah Tower, and is asking contractors for revised prices for the construction contract.
UAE federal rail company Union Railway has set out a clear timeline for the development of its $11bn union-wide railway network, which will eventually link the UAE with the rest of the GCC. At a meeting in Abu Dhabi on 24 March, the company told international engineering firms that it will start the tendering process for construction contracts on the first phase of the project in the second quarter of the year. Companies will be prequalified to bid on the deals by September. The first phase of the railway involves the construction of a 264-kilometre line connecting the Shah gas field in the south of the emirate with oil and gas processing and distribution facilities at the port of Ruwais in the north. The route will be for freight transport initially, although Union Railway is also planning passenger services.
Corporates in the region look set to borrow nearly $5bn in loans in April, indicating that loan market activity is returning. This follows a slow first quarter, in the wake of the Dubai World debt standstill request in November 2009. April’s total loan activity should exceed the $4.25bn raised in the whole of the first quarter of 2010. So far though, total loan volumes for the first four months of the year are still behind that of 2009. In the first four months of 2009, about $11bn of loans were arranged, compared with just $9bn expected to be signed by the end of April 2010.
The US’ ConocoPhillips faces losses of hundreds of millions of dollars after quitting a second successive major oil and gas scheme in the Gulf. Conoco confirmed on 28 April that it would not take part in the $10bn Shah gas development in Abu Dhabi. It was to be a 40 per cent partner in the project, with Abu Dhabi National Oil Company (Adnoc) taking the remaining 60 per cent share. This followed the 21 April announcement that the company was quitting the $10bn Yanbu refinery development in Saudi Arabia, in which the company was a joint venture partner with energy giant Saudi Aramco.
The domestic demand for cement in the UAE has fallen by 30 per cent when compared to 2009 and by 45 per cent in comparison to 2008. MEED surveyed 10 producers across the UAE. On average, suppliers said they were now producing less cement than they were in 2009 because domestic demand had fallen. The fall in demand follows the slump in construction activity in Dubai since late 2008. According to MEED Projects, $290bn-worth of projects are on hold or have been cancelled in the emirate in 2010.
Kuwait has cancelled plans to build a government-run power and water plant at Al-Zour North and will use the site set aside for the scheme to house the country’s first independent facility. The decision to substitute the country’s first independent water and power plant for the original scheme was made by the country’s governing cabinet in June, according to senior Ministry of Electricity and Water (MEW) sources. The plant will have a capacity of 1,500MW of power and 100 million gallons a day of desalinated water.
Dubai’s Roads and Transport Authority (RTA) is planning to launch its first public private partnership (PPP) and is currently seeking advisers to help run the process. The project is expected to be the first of several PPPs launched by the RTA and comes as Dubai is changing its model for financing infrastructure projects in the wake of the economic slowdown and debt crisis at its state-owned firms. The RTA’s first project involves the development of a AED200m ($54m) water transportation scheme that will run along the coastline of Dubai, with the possibility of extending the service into neighbouring emirates, including Sharjah and Abu Dhabi.
Tripoli has restarted work on a $54bn scheme to turn the Gulf of Sirte into an industrial and energy hub and plans to open talks with potential investors in a series of oil refining, gas export, petrochemicals and real-estate projects by the end of September. In June, the Libyan government created two new companies to push forward its plans for the region, which include two giant ‘energy cities’ at the coastal towns of Marsa el-Brega and Ras Lanuf.
Saudi Arabia’s Saline Water Conversion Corporation has awarded contracts worth $4.18bn to build a power and water desalination plant at Ras al-Zour. The local Al-Arrab Contracting Company and its Chinese partner Sepco III Electric Power Construction Corporation has won the $2.42bn contract to build the electricity generation component of the project. The consortium submitted the cheapest option for the power component when bids were submitted in May.
Algeria’s National Agency for the Valorisation of Hydrocarbon Resources (Alnaft) has announced a third oil and gas licence bidding round in the North African state. The licencing round is the first auction and first major hydrocarbons development since Youcef Yousfi replaced Chakib Khelil as Algeria’s energy minister and the senior management of the state-owned oil company Sonatrach were removed due to corruption allegations. The third bid round coupled with the change in the top level management of Algeria’s hydrocarbons sector should see the country’s oil and gas industry rise from its current malaise, say senior Middle East energy analysts.
Kuwait is tendering design contracts for billions of dollars of sporting infrastructure that will enable it to host future Olympic Games. The oil-rich country is following in the footsteps of a number of its neighbouring Gulf states that are planning to invest large sums of capital to win the right to host major sporting events. Dubai is currently considering making a bid to host the Olympics in 2020 and Qatar has bid to host football’s World Cup in 2022. Kuwait’s Public Authority for Housing Care has invited nine local consultants to prequalify for a contract to design an Olympic Village at its Sabah al-Ahmed development, located in the Al-Ahmadi governorate.
Abu Dhabi has put on hold a AED5bn ($1.36bn) football stadium being developed by the government-owned investment firm Mubadala Development Company. Mubadala sent letters to contractors bidding for the deal on 12 October informing them that the tender is cancelled. According to sources close to the project, the letters say the scheme has been put on hold by the government of Abu Dhabi. The cancellation of the tender comes just a few days ahead of the expiry of the tender bonds on the development. Mubadala had received five bids for the development of the 65,000-capacity stadium in June. It was due to be built as part of the new Capital City District next to Khalifa City, between Mussafah and Abu Dhabi International airport.