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BUY THIS REPORT
TRUSTED UNIQUE DETAILED
Written by MEEDs experts, with chapters from Colin Foreman,
Andrew Roscoe, Jennifer Aguinaldo, Indrajit Sen. Curated
and reviewed by Richard Thompson.
Includes unique expert analysis of how the market is changing and the impact of
these market changes.
Detailed assessment of the outlook, opportunities and
challenges in all of the major business areas.
"The quality of information provided by MEED Insight enabled us to quickly focus on critical areas as well as providing in-depth research into future opportunities."
300+ pages mega projects 10 key business sectors review on the Vision 2030
SAUDI ARABIA 2019Trends, opportunities and challenges
in the Middle East's biggest market
CLICK HERE
Anne BunchConsultancy company based in Dubai
Saudi Arabia 2019
Kuwait Projects 2016
3
Contents Preface .................................................................................................................................................... 2
1 Executive summary ........................................................................................................................ 10
2 Economic transformation ............................................................................................................... 13
Vision 2030: Progress Report ............................................................................................... 16
2.1.1 Social reforms ................................................................................................................... 17
2.1.2 Transformational megaprojects ......................................................................................... 17
2.1.3 The rise of the PIF ............................................................................................................. 19
2.1.4 Aramco IPO ....................................................................................................................... 19
2.1.5 Privatisation and PPPs ...................................................................................................... 20
2.1.6 Corruption crackdown ....................................................................................................... 21
2.1.7 NTP 2.0 ............................................................................................................................. 21
Vision 2030 targets ............................................................................................................... 22
2.2.1 Economy ........................................................................................................................... 23
2.2.2 Project spending................................................................................................................ 23
2.2.3 Public Investment Fund (PIF) ............................................................................................ 23
2.2.4 Oil & gas ............................................................................................................................ 23
2.2.5 Tourism & culture .............................................................................................................. 24
2.2.6 Housing ............................................................................................................................. 24
2.2.7 Healthcare ......................................................................................................................... 24
2.2.8 Education .......................................................................................................................... 24
2.2.9 Small and medium-sized enterprises (SMEs) ................................................................... 24
2.2.10 Labour market ............................................................................................................... 25
2.2.11 Private sector development ........................................................................................... 25
2.2.12 Defence ......................................................................................................................... 25
2.2.13 Mining ............................................................................................................................ 25
2.2.14 Renewable energy & waste management .................................................................... 25
2.2.15 Transport & logistics ...................................................................................................... 26
2.2.16 GCC .............................................................................................................................. 26
2.2.17 Food & agriculture ......................................................................................................... 26
2.2.18 Digital economy ............................................................................................................. 26
National Transformation Programme (NTP) ......................................................................... 27
2.3.1 National Project Management Office ................................................................................ 28
2.3.2 NTP targets ....................................................................................................................... 28
3 Government ................................................................................................................................... 33
Change in the ruling family .................................................................................................... 33
Relations with the US ............................................................................................................ 36
Regional diplomacy and conflict............................................................................................ 36
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4
3.3.1 Yemen ............................................................................................................................... 38
3.3.2 Arms sales ......................................................................................................................... 38
Diplomatic disputes ............................................................................................................... 38
Saudi Arabia and global oil markets ..................................................................................... 39
Economic and social development ....................................................................................... 40
Social reforms ....................................................................................................................... 41
4 Economy ........................................................................................................................................ 43
GDP ....................................................................................................................................... 43
4.1.1 GDP by sector ................................................................................................................... 44
Inflation .................................................................................................................................. 45
Oil production ........................................................................................................................ 46
Government finances ............................................................................................................ 47
4.4.1 Anti-corruption drive .......................................................................................................... 48
4.4.2 Government debt............................................................................................................... 49
Trade flows ............................................................................................................................ 51
Banking and monetary policy ................................................................................................ 52
4.6.1 Interest rates ..................................................................................................................... 53
Stock market ......................................................................................................................... 53
Foreign direct investment ...................................................................................................... 54
Labour market ....................................................................................................................... 55
The economy in 2018-20 ...................................................................................................... 57
4.10.1 The oil market ................................................................................................................ 58
4.10.2 Budget 2019 .................................................................................................................. 60
4.10.3 Medium-term financial strategy ..................................................................................... 62
MEED forecast to 2020 ......................................................................................................... 65
4.11.1 GDP ............................................................................................................................... 65
4.11.2 The budget .................................................................................................................... 66
4.11.3 Government debt........................................................................................................... 68
4.11.4 Exports, imports and the current account ..................................................................... 69
Saudi Aramco IPO ................................................................................................................ 70
The IMF view ......................................................................................................................... 71
Credit ratings agencies ......................................................................................................... 72
5 Projects market .............................................................................................................................. 73
Spending drivers ................................................................................................................... 76
Outlook .................................................................................................................................. 77
Leading contractors ............................................................................................................... 78
Leading clients ...................................................................................................................... 79
Megaprojects ......................................................................................................................... 80
Saudi Arabia 2019
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5
6 Oil and Gas .................................................................................................................................... 84
Overview ............................................................................................................................... 84
Vision 2030 targets ............................................................................................................... 87
Market structure .................................................................................................................... 87
Saudi Aramco ........................................................................................................................ 88
6.4.1 Aramco IPO ....................................................................................................................... 91
6.4.2 Aramco’s Downstream Strategy ........................................................................................ 92
Upstream oil .......................................................................................................................... 93
6.5.1 Revised Proven Reserves ................................................................................................. 93
6.5.2 Oil Production .................................................................................................................... 94
6.5.3 Resource depletion ........................................................................................................... 95
6.5.4 Exploration ........................................................................................................................ 99
6.5.5 Export infrastructure .......................................................................................................... 99
Natural gas .......................................................................................................................... 100
6.6.1 Liquified Petroleum Gas (LPG) ....................................................................................... 103
6.6.2 Wasit gas development ................................................................................................... 103
6.6.3 Fadhili Gas Plant ............................................................................................................. 103
6.6.4 Unconventional gas ......................................................................................................... 104
6.6.5 Shaybah NGL .................................................................................................................. 105
6.6.6 Empty Quarter ................................................................................................................. 105
6.6.7 Midyan project ................................................................................................................. 106
6.6.8 Gas demand .................................................................................................................... 106
6.6.9 Fuel reforms .................................................................................................................... 106
Refining ............................................................................................................................... 107
6.7.1 Refinery projects ............................................................................................................. 110
Projects market ................................................................................................................... 112
6.8.1 Leading contractors ......................................................................................................... 115
7 Petrochemicals ............................................................................................................................ 117
Petrochemical Industry overview ........................................................................................ 117
Feedstock issues ................................................................................................................ 118
Refining petrochemicals integration initiative ...................................................................... 119
Key companies .................................................................................................................... 121
7.4.1 Sabic ............................................................................................................................... 121
7.4.2 Saudi Aramco .................................................................................................................. 124
7.4.3 Sipchem .......................................................................................................................... 125
7.4.4 Tasnee ............................................................................................................................ 125
7.4.5 Chevron Phillips .............................................................................................................. 126
Projects market ................................................................................................................... 126
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6
8 Mining and natural resources ...................................................................................................... 128
Investment ........................................................................................................................... 132
Gold and base metals ......................................................................................................... 134
8.2.1 Base Metals ..................................................................................................................... 136
Phosphate ........................................................................................................................... 136
Aluminium and bauxite ........................................................................................................ 138
Industrial minerals ............................................................................................................... 139
Exploration .......................................................................................................................... 139
Vision 2030 targets ............................................................................................................. 140
Talent and experience ......................................................................................................... 141
9 Industry ........................................................................................................................................ 142
Diversification ...................................................................................................................... 143
9.1.1 Incentives ........................................................................................................................ 144
9.1.2 Industrial cities ................................................................................................................. 145
9.1.3 Challenges ...................................................................................................................... 148
9.1.4 Employment .................................................................................................................... 149
Automotive .......................................................................................................................... 150
Polysilicon ........................................................................................................................... 151
Cement ................................................................................................................................ 152
Steel .................................................................................................................................... 154
Aluminium ............................................................................................................................ 157
Fertilisers ............................................................................................................................. 158
Defence ............................................................................................................................... 159
9.8.1 Vision 2030 targets and impact ....................................................................................... 160
Outlook ................................................................................................................................ 162
10 Power ...................................................................................................................................... 165
Overview ............................................................................................................................. 165
Market Structure .................................................................................................................. 166
Supply and demand ............................................................................................................ 167
10.3.1 Installed Capacity ........................................................................................................ 167
10.3.2 Power Generation ....................................................................................................... 170
10.3.3 Power Consumption .................................................................................................... 171
10.3.4 Peak Load Demand .................................................................................................... 172
Power generation projects .................................................................................................. 175
Upcoming projects .............................................................................................................. 176
Conversion projects ............................................................................................................ 177
Steam plants ....................................................................................................................... 178
Decommissioning ................................................................................................................ 178
Saudi Arabia 2019
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7
Private power market .......................................................................................................... 179
Developers ...................................................................................................................... 182
SEC privatisation ............................................................................................................. 183
SWCC privatisation ......................................................................................................... 185
Fuel sources .................................................................................................................... 185
Nuclear ............................................................................................................................ 186
Energy efficiency ............................................................................................................. 187
Transmission & distribution ............................................................................................. 189
11 Renewable energy .................................................................................................................. 194
Overview ............................................................................................................................. 194
NREP projects ..................................................................................................................... 198
Other projects ...................................................................................................................... 200
12 Desalination............................................................................................................................. 203
Market structure .................................................................................................................. 204
Supply/demand ................................................................................................................... 204
Saline Water Conversion Corporation ................................................................................ 206
Private developers .............................................................................................................. 208
Future private projects ........................................................................................................ 210
Decommissioning ................................................................................................................ 211
Future projects .................................................................................................................... 212
Privatisation ......................................................................................................................... 213
13 Wastewater ............................................................................................................................. 214
Management contracts ........................................................................................................ 215
13.1.1 Future private sector partnerships .............................................................................. 218
Past and future spending .................................................................................................... 219
13.2.1 PPP water projects ...................................................................................................... 221
13.2.2 Water masterplans ...................................................................................................... 221
Groundwater........................................................................................................................ 223
Treated sewage effluent ...................................................................................................... 223
Marafiq ................................................................................................................................ 226
14 Construction ............................................................................................................................ 228
Overview ............................................................................................................................. 228
Projects market ................................................................................................................... 230
14.2.1 Major projects under execution ................................................................................... 230
14.2.2 Projects on hold........................................................................................................... 230
14.2.3 Projects pipeline .......................................................................................................... 231
14.2.4 Leading clients ............................................................................................................ 232
Contractors and the government......................................................................................... 233
Saudi Arabia 2019
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8
14.3.1 Leading contractors ..................................................................................................... 234
PPP projects........................................................................................................................ 235
Real estate .......................................................................................................................... 236
14.5.1 Major project pipeline .................................................................................................. 237
14.5.2 Housing ....................................................................................................................... 240
Healthcare ........................................................................................................................... 243
Education ............................................................................................................................ 244
Roads .................................................................................................................................. 245
15 Tourism ................................................................................................................................... 248
Overview ............................................................................................................................. 248
Vision 2030 and the tourism sector ..................................................................................... 254
Cultural tourism ................................................................................................................... 255
Hospitality ............................................................................................................................ 256
Leisure projects ................................................................................................................... 258
Retail projects...................................................................................................................... 260
16 Rail .......................................................................................................................................... 262
Railway masterplan ............................................................................................................. 263
Structure of the rail industry ................................................................................................ 264
Mainline rail infrastructure ................................................................................................... 266
16.3.1 North-South Railway ................................................................................................... 266
16.3.2 Haramain high-speed railway ...................................................................................... 269
16.3.3 Saudi Landbridge ........................................................................................................ 269
16.3.4 Other lines ................................................................................................................... 269
16.3.5 Mainline railways – PPP .............................................................................................. 270
Metro/light rail transit ........................................................................................................... 271
16.4.1 Urban rail – PPP.......................................................................................................... 271
16.4.2 Riyadh Metro ............................................................................................................... 272
16.4.3 Mecca Metro ................................................................................................................ 275
16.4.4 Medina Metro .............................................................................................................. 276
16.4.5 Jeddah Metro .............................................................................................................. 277
16.4.6 Dammam Metro ........................................................................................................... 280
Monorail ............................................................................................................................... 280
17 Aviation .................................................................................................................................... 282
Airport projects .................................................................................................................... 285
17.1.1 Planned and unawarded projects................................................................................ 289
Market liberalisation ............................................................................................................ 291
17.2.1 Privatisation of the aviation sector .............................................................................. 293
18 Ports ........................................................................................................................................ 296
Saudi Arabia 2019
Kuwait Projects 2016
9
Sector drivers ...................................................................................................................... 298
Major ports .......................................................................................................................... 298
Projects and investments .................................................................................................... 300
Port-rail links........................................................................................................................ 302
Privatisation ......................................................................................................................... 302
Public private partnerships (PPP) ....................................................................................... 303
Vision 2030 targets ............................................................................................................. 303
19 Doing Business ....................................................................................................................... 304
Foreign direct investment in Saudi Arabia .......................................................................... 305
Trading with Saudi Arabia ................................................................................................... 306
Doing business with the public sector ................................................................................. 310
Saudi Arabia’s Privatisation Push ....................................................................................... 311
Taxation ............................................................................................................................... 312
Employment law .................................................................................................................. 313
Intellectual property ............................................................................................................. 315
Enforcing contracts, resolving disputes, and liquidating a business ................................... 315
Copyright 2019 MEED Media FZ LLC
All rights reserved. No part of this publication may be reproduced, stored in any retrieval system, or transmitted in
any form, by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission
of the copyright owner. While every care has been taken in completing this report, no responsibility can be accepted
for any errors or omissions that may occur.
BUY THIS REPORT
TRUSTED UNIQUE DETAILED
Written by MEEDs experts, with chapters from Colin Foreman,
Andrew Roscoe, Jennifer Aguinaldo, Indrajit Sen. Curated
and reviewed by Richard Thompson.
Includes unique expert analysis of how the market is changing and the impact of
these market changes.
Detailed assessment of the outlook, opportunities and
challenges in all of the major business areas.
"The quality of information provided by MEED Insight enabled us to quickly focus on critical areas as well as providing in-depth research into future opportunities."
300+ pages mega projects 10 key business sectors review on the Vision 2030
SAUDI ARABIA 2019Trends, opportunities and challenges
in the Middle East's biggest market
CLICK HERE
Anne BunchConsultancy company based in Dubai
Saudi Arabia 2019
Kuwait Projects 2016
45
The second biggest area of activity is the government services sector, which is essentially
funded by oil revenues and includes items such as public administration, defence and other
activities.
The third largest area of activity is financial and business services, followed by wholesale
and retail trade, restaurant and hotels – a sector which is being boosted by growing
demand for services for pilgrims and should also benefit from the ongoing development of
the general tourism industry – and then manufacturing industry, such as petrochemicals,
steel and aluminium.
Saudi GDP by sector, 2017 (% of total)
Source: Sama
Inflation
Saudi inflation, 2007−2018 (%)
Source: IMF
Oil and gas, 28.2
Govt services , 19.1
Finance, real estate & business
services, 13.1Trade, restaurants & hotels, 10.7
Manufacturing, 9.7
Transport & communications,
6.4
Construction, 6.0
Agriculture, 2.5
Community, social & personal
services, 2.3
Utilities, 1.6
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Saudi Arabia 2019
Kuwait Projects 2016
74
After two challenging years in which the value of contracts awarded in Saudi Arabia
plummeted to about half of the 2010–15 average, the kingdom’s projects industry received
a welcome boost in October 2017 from Crown Prince Mohammad bin Salman’s
announcement of a series of mega-projects aimed at transforming the Saudi economy.
These mega-projects included the $500bn Neom project. However, there are doubts about
how quickly such schemes will move forward.
Overall, between 2010 and 2018, Saudi Arabia awarded close to $366bn of contracts
across all sectors; $228bn of contracts are still under execution.
Total value of contract awards, 2010−18 ($m)
Source: MEED Projects
Contract awards by sector, 2010−18 ($m)
Source: MEED Projects
31,560
49,591
40,354
58,299
50,896
57,624
27,320 28,810
21,389
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
130,712
82,267
16,176
26,164
47,087
24,545 29,458
9,434
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Saudi Arabia 2019
Kuwait Projects 2016
83
Ministry of Housing. Saudi Arabia and South Korea have signed an agreement to build
100,000 houses in the Al-Fursan region over the next seven years.
Another major deal due to be signed this year is a $16bn contract for the construction of
the Mecca Metro by the Makkah Mass Rail Transit Company (MMRTC), which involves
four new metro lines – A, B, C and D – complementing the Al-Mashaaer Al-Mugaddassah
metro line.
Largest projects due for award in 2019
Owner - Project Budget
($m) Status Completion
PIF - Neom: Infrastructure and Utilities 100,000 Study 2025
MOH - Dahiyat Alfursan 20,000 Study 2025
MMRTC - Mecca Metro 16,000 Bid Evaluation 2030
Jeddah Metro Company - JPTP: Jeddah Metro 13,000 Main Contract PQ 2023
PIF - Red Sea Project 10,000 Main Contract PQ 2030
Makkah Region Development Authority - Al Faisaliah City
10,000 Study 2025
GACA - KAIA: Phase 2 10,000 Study 2026
REPDO - Renewable Energy Program: Round II 10,000 Main Contract PQ 2023
Jeddah Metro Company - Jeddah Metro: Orange & Blue Lines
8,000 Main Contract PQ 2023
MMRTC - Mecca Metro: Lines B and C 8,000 Bid Evaluation 2024
SAR - Saudi Landbridge 7,000 Main Contract PQ 2023
Maaden - Third Phosphate Fertiliser Manufacturing Facility
6,400 Study 2024
PIF - New Jeddah Downtown 5,000 Study 2029
Satorp - Mixed Feed Cracker & Derivatives complex
5,000 Study 2024
SRO - Yanbu Jeddah Jizan and Taif Khamis Mushayt Abha Rails
4,200 Study 2025
MMRTC - Mecca Metro: Line D 4,000 Study 2024
MMRTC - Mecca Metro: Line A 4,000 Study 2024
WEC - Jubail 3 IWPP 4,000 Main Contract PQ 2022
MMRTC - Mecca Metro: Phase 1 (Lines B, C): Part 1: Package 3 (SYS)
3,547 Bid Evaluation 2024
Jeddah Metro Company - Jeddah Metro: Red Line 3,500 Main Contract PQ 2023
SB Energy - Solar PV Project at Sudair 3,000 Bid Evaluation 2023
Ministry of Municipal and Rural Affairs - Riyadh Storm Water Drainage Project
2,900 Design 2022
Shomoul Holding - The Avenues Riyadh: Mixed Use Development
2,700 Design 2021
MMRTC - Mecca Metro: Phase 1 (Lines B, C): Part 1: Civil: Package 1
2,653 Bid Evaluation 2024
SCTA - Al Rayis Development 2,500 Design 2027
SEC - Shuqaiq Power Plant Expansion: Phase 1 2,500 Study 2022
SEC - Jeddah South Power Plant: Phase 2 Expansion
2,500 Study 2023
YALJ - Kaaki Development in Mecca 2,000 Design 2022
PQ: Pre-Qualification; Source: MEED Projects
BUY THIS REPORT
TRUSTED UNIQUE DETAILED
Written by MEEDs experts, with chapters from Colin Foreman,
Andrew Roscoe, Jennifer Aguinaldo, Indrajit Sen. Curated
and reviewed by Richard Thompson.
Includes unique expert analysis of how the market is changing and the impact of
these market changes.
Detailed assessment of the outlook, opportunities and
challenges in all of the major business areas.
"The quality of information provided by MEED Insight enabled us to quickly focus on critical areas as well as providing in-depth research into future opportunities."
300+ pages mega projects 10 key business sectors review on the Vision 2030
SAUDI ARABIA 2019Trends, opportunities and challenges
in the Middle East's biggest market
CLICK HERE
Anne BunchConsultancy company based in Dubai
Saudi Arabia 2019
Kuwait Projects 2016
93
parent Hyundai Heavy Industries (HHI). This adds to Aramco’s existing 64.3 per cent stake
in S-Oil Corp, South Korea’s third-largest refiner.
Aramco is expected to continue shopping for refining assets going forward. The company’s
downstream capacity covers only a third of its production – a much lower ratio than the oil
majors Aramco wants to compete with. Greater downstream integration would also provide
a key hedge against low oil prices in the future.
Upstream oil
Hydrocarbons resources in Saudi Arabia are limited to a relatively small geographical
region and a number of large oil fields. Production primarily comes from 12 reservoirs in
the north-eastern corner of the kingdom, along with the Shaybah field in the south.
The kingdom has three of the world’s six giant fields in Khurais, Safaniya and Ghawar,
which each have the capacity to produce over 1 million b/d. Ghawar is the world’s largest
oil field, and is capable of producing about 5 million b/d. Safaniya and Khurais each
possess a production capacity of 1.2 million b/d.
Other large fields in the kingdom include Shaybah, Zuluf and Abu Safah, which produce
750,000-850,000 b/d. The Marjan and Qatif are also major fields, with production
capacities of 450,000-500,000 b/d each. Saudi Arabia’s allocation from the Divided Zone
is about 350,000 b/d. Other smaller fields include Haradh and Berri, each with capacities
of over 300,000 b/d.
Saudi oil and gas fields
Source: Arab Oil & Gas Directory
6.5.1 Revised Proven Reserves
In January 2019, Aramco revealed Saudi Arabia’s hydrocarbons reserves after a third-
party audit – a process carried out as part of its plans to prepare for a stock market listing.
Saudi Arabia 2019
Kuwait Projects 2016
137
Maaden Phosphate Company
MPC’s main source of phosphate rock is the Al-Jalamid mine in the north, near the border
with Iraq. The site includes a beneficiation plant and supporting infrastructure. The mine
produces about 11.6 million tonnes a year (t/y) of ore, which is processed into about 5
million t/y of dry concentrate.
The phosphate concentrates at Al-Jalamid, which has a measured resource of 534 million
tonnes, is transported by rail to Ras Al-Khair on the Gulf coast for processing into fertiliser.
Ras Al-Khair, 90km north of Jubail, hosts MPC’s $5bn integrated chemicals and fertiliser
production plant, which manufactures saleable products from Al-Jalamid concentrate.
The fertiliser complex contains a phosphoric acid plant, sulphuric acid plant, ammonia
plant, di-ammonium phosphate (DAP) granulation plant, a co-generation, and
desalinisation plant and associated facilities.
Railways supporting Ras Al-Khair minerals city
Source: Maaden
The DAP granulation plant started production in February 2012 and has a capacity of 3
million t/y. The offtake from the plant is sold on the international market, with 400,000 t/y
of surplus ammonia being sold domestically or internationally.
The complex also has the capability to produce mono-ammonium phosphate (MAP) if
market requirements demand it. A new ammonia plant began production at Ras Al-Khair
in January 2017.
The process for establishing a third sulphuric acid plant (DAP3) at the site is underway. In
November 2018, Maaden signed the financing agreement of $266m with Industrial
Development fund for the development of the project. The main contract tender issue for
the project is expected in the third quarter of 2019.
Saudi Arabia 2019
Kuwait Projects 2016
171
Package (82 per cent completed); and PP13 Combined Cycle Power Plant: Early &
General Civil Works Package (85 per cent completed).
The £925m SEC PP14 Combined Cycle Power Plant covers three projects: PP14
Combined Cycle Power Plant: Electro-mechanical Installation Package (95 per cent
completed); PP14 Combined Cycle Power Plant: Industrial Buildings Package (96 per cent
completed); and PP14 Combined Cycle Power Plant: Early & General Civil Works Package
(completed).
Major power plants under construction
Project Owner Main Contractor Estimated contract
value ($m)
Scheduled commissioning
Jizan Refinery IGCC Power Plant: Package 4: CCPP
Saudi Aramco SEPCO 2,500 2020
Yanbu Power Plant: Phase 3 SWCC/Marafiq JV SEPCO III Electric Power Construction Corp
1,370 2020
Jizan Refinery IGCC Power Plant: Package 1: Gasification Unit
Saudi Aramco Saipem 1,000 2019
Jizan Refinery IGCC Power Plant: Package 2: Sulphur Recovery Unit
Saudi Aramco Saipem 1,000 2019
Waad Al Shamal Integrated Solar Combined Cycle (ISCC) Power Plant
SEC General Electric/Abener JV
980 2019
Fadhili IPP Saudi Aramco/SEC
Doosan Heavy Industries & Construction Co.
896 2019
PP13 Combined Cycle Power Plant: Electro-mechanical Installation Package
SEC GAMA 320 2019
PP14 Combined Cycle Power Plant: Electro-mechanical Installation Package
SEC SEPCO III Electric Power Construction Corp
293 2019
PP14 Combined Cycle Power Plant: Industrial Buildings Package
SEC Alkifah Contracting 160 2019
Upgrade Sulfur Handling and Export Facilities at Berri Gas Plant
Saudi Aramco M R Al Khathlan for Contracting
130 2019
PP14 Combined Cycle Power Plant: Early & General Civil Works Package
SEC Archirodon 120 2019
PP13 Combined Cycle Power Plant: Early & General Civil Works Package
SEC Assad Said Contracting
118 2019
PP13 Combined Cycle Power Plant: Industrial Buildings Package
SEC Alfanar Bena Contracting
61 2019
Source: MEED Projects
10.3.3 Power Consumption
Power consumption in the kingdom has increased due to rising economic activity, as well
as buoyant residential consumption.
The residential sector was the largest consumer of electricity in the kingdom in 2017,
accounting for 48 per cent of total energy consumption that year. The industrial sector was
the second largest user, accounting for 18 per cent, followed by commercial users with 16
per cent and government with 13 per cent.
BUY THIS REPORT
TRUSTED UNIQUE DETAILED
Written by MEEDs experts, with chapters from Colin Foreman,
Andrew Roscoe, Jennifer Aguinaldo, Indrajit Sen. Curated
and reviewed by Richard Thompson.
Includes unique expert analysis of how the market is changing and the impact of
these market changes.
Detailed assessment of the outlook, opportunities and
challenges in all of the major business areas.
"The quality of information provided by MEED Insight enabled us to quickly focus on critical areas as well as providing in-depth research into future opportunities."
300+ pages mega projects 10 key business sectors review on the Vision 2030
SAUDI ARABIA 2019Trends, opportunities and challenges
in the Middle East's biggest market
CLICK HERE
Anne BunchConsultancy company based in Dubai
Saudi Arabia 2019
Kuwait Projects 2016
189
Transmission & distribution
The kingdom has comfortably been the region’s largest spender on transmission and
distribution (T&D) infrastructure since 2008, with about $28.9bn-worth of contracts
awarded until the end of December 2018. The largest of these was a $550m contract
awarded in 2008 to Middle East Engineering & Development Company for the construction
of the Qassim-Medina Transmission Line project.
Transmission & Distribution contract awards, 2011−18 ($m)
Source: MEED Projects
Investment in the transmission sector increased from 2011 to 2014 when it peaked at a
total value of nearly $6bn. Investment in the transmission sector is divided between
investment in cables and overhead lines, as well as substations and control centres.
Investment in the latter accounted for an average of 66 per cent of total investment
between 2011 and 2014.
Post-2014, there was a declining trend in investment in the transmission sector. Between
2017 and 2018, there was a marginal increase in investment, particularly in cables and
overhead lines.
Selected T&D contract awards, 2018–2019*
Project name Contractor Value ($m)
230/115/69 kV Abqaiq Central Substation Al Babtain Contracting 80
380/132/13.8 kV Al-Remal Substation (9046) Al Babtain Contracting 64 380kV OHTL from Arar BSP and Waad Shamaal BSP National Contracting Company 64 380KV OHTL Fadhili Gas Plant S/S to Wadi Al Summan 380/115/33kv BSP
Arabia Electrical Transmission Line Construction Company 62
380/230 kV Haradh & Hawaiyah OHTL Middle East Engineering & Development Co 60
Construction of EIC S/S 1 & 2 and Transmission Line Larsen & Toubro 60 380 kV UG for Al Rawabe(9047) BSP to Riyadh Metro (9054) BSP & 9017
Saudi Services for Electro Mechanic Works 60
2,7653,114
3,324
5,980
3,740
1,855
910 997
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2011 2012 2013 2014 2015 2016 2017 2018
Saudi Arabia 2019
Kuwait Projects 2016
205
Historically, the kingdom opted for desalination rather than alternatives such as large water
transfer projects or further over-exploitation of deep groundwater. However, much of the
existing desalination capacity was built before 1990 and needs to be replaced over the
coming decade.
Existing desalination plants
Source: SWCC
In 2000-08, very little new capacity was commissioned as a result of budgetary problems
for the government and SWCC; this was exacerbated by the fact that several contractors
faced serious payment issues for projects undertaken in the late 1990s.
However, rising oil prices and the launch of a utility privatisation programme resulted in an
increase in investment. In 2010, Saudi Arabia regained its position as the leading
desalination producer after two of the world’s largest plants – the Shuaibah IWPP on the
Red Sea and the Jubail IWPP on the Gulf coast – were commissioned. The plants boosted
Water supply by source (million cm/d), 2017
Sources: SWCC
6.5
3.3
0.2
0
1
2
3
4
5
6
7
Desalination water Ground water Surface water
Saudi Arabia 2019
Kuwait Projects 2016
225
Demand for TSE in Riyadh, Jeddah, Medina, Mecca and Greater Dammam, 2012−30
(thousand cm/d)
Source: NWC
To address this area, NWC is planning to spend an average of $600m a year on TSE
projects until 2028, including $1.5bn on projects in three major cities over the next four
years. Among its plans, the company will invest $800m in Riyadh, $530m in Jeddah and
$160m in Mecca.
All NWC’s new treatment projects will employ tertiary technology as a minimum. This is a
prerequisite, given that NWC is aiming for a significant increase in TSE reuse.
NWC has signed more than 12 agreements and memorandums of understanding (MoUs)
with companies for bulk TSE supply. Under the 20–25-year contracts, the private sector is
responsible for distributing the TSE from the STPs.
Forecast of TSE usage in the kingdom’s six major cities, 2011−30 (cm/d)
Source: NWC
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2012 2013 2014 2015 2016 2020 2024 2028 2030
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
Riyadh Jeddah Makkah Madinah Dammam & khober.
Saudi Arabia 2019
Kuwait Projects 2016
249
Saudi Arabia tourism contract awards, 2010−18
Source: MEED Projects
The biggest project currently on hold is the construction of four-star hotels in Group 4A of
Dar Al Hijrah’s Pilgrim City project. Dar Al Hijrah, a body owned by the Public Investment
Fund, is planning to develop an integrated mixed-use project called Pilgrim City comprising
100 buildings to accommodate over 120,000 pilgrims and 31,000 employees.
Major tourism projects on hold in Saudi Arabia
Project Value ($m)
Client
Pilgrim City: Four Star Hotels: Group 4 A 1,000 Dar Al Hijrah Company
Ishbiliyah City Centre 800 Majid Al Futtaim
Salboukh Mall in Riyadh 600 Arabian Centres
Grand Mosque Expansion: Utilities Bldg 540 General Presidency for Grand Mosque and Prophet Mosque Affairs
Botanical Gardens In Riyadh: Phase 3 500 King Abdullah International Gardens
Riyadh Land: Kingdom Oasis: Four Seasons
500 Kingdom Holdings
Mecca Museum 500 Saudi Commission for Tourism & National Heritage
Four Seasons Hotel in Jeddah 480 Midad Real Estate Investment & Development Co
Sharma Complex: Hotels & Accomodation 360 PIF
Riyadh Walk 320 Raj Real Estate
Jeddah Gate: Radisson Blu Hotel & Residence
300 Al Tawfeeq for Development & Investment
Sofitel Luxury 5 Star Hotel In Riyadh 300 King Abdullah bin Abdulaziz Foundation for Housing Dev
Millennium Jeddah (Corniche Jeddah) 250 Al Sharif Mansour Bin Saleh Abu Rayash Investment & Development Co
Source: MEED Projects
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
Cultural Hospitality Leisure Retail
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Saudi Arabia 2019
Kuwait Projects 2016
275
16.4.3 Mecca Metro
Mecca has a light rail system in operation, but it is only used during peak pilgrimage times,
which is about seven days a year, to transport worshippers between various holy sites.
The pilgrim metro line, also known as the Al Mashaaer al Mugadassah Metro, links the
holy sites of Mecca, Mina, Arafat and Muzdalifah. It spans 18km, and has the capacity to
transport 72,000 passengers an hour.
The metro was built by Chinese contractors under a $1.77bn contract between the
Municipal & Rural Affairs Ministry and China Railway Construction Corporation (CRCC)
signed in February 2009. The contract covered the construction of the scheme and a three-
year O&M concession.
After a limited capacity test run during the 2010 Hajj, the metro was used at full capacity
from 2011 to 2013. CRCC operated the trains from 2011 to 2013, incurring net losses
estimated at $607m prior to transferring the project to the client. In May 2015, Malaysia’s
Prasarana Berhad won a SR807m three-year O&M contract for the service.
A further multi-phased light rail project has also been proposed for the city. The proposed
Mecca mass rail transit project (MMRT) will include the construction of four new metro
lines, A, B, C and D, complementing the Al Mashaaer Al Mugaddassah line. The new lines
will have a total length of 180km and will link about 88 stations.
The project aims to address the city’s traffic congestion issues, caused by a consistently
growing population and the rising number of pilgrims, whose number is expected to exceed
25 million by 2030.
Mecca Metro
Source: Development Commission of Mecca and Mashaer
Saudi Arabia 2019
Kuwait Projects 2016
297
Due to its location on the Red Sea coast and its relative proximity to the Suez Canal, KAP
is being touted as Saudi Arabia’s response to Jebel Ali port in Dubai, catering not only to
the domestic market but to transhipment cargo as well.
Saudi ports
Sources: Saudi Ports Authority; Ports Development Company; MEED
Annual cargo throughput at Saudi ports (million tonnes), 2013−17
Source: Saudi Ports Authority (SPA)
0
50
100
150
200
250
300
2013 2014 2015 2016 2017
Import Export
Saudi Arabia 2019
Kuwait Projects 2016
307
Petroleum products form a large majority of exports (78.5 per cent in 2018), followed by
petrochemicals products such as propylene and ethylene. Automobiles represent the
largest share of imports, followed by telecoms devices and medicine.
The kingdom exports mainly to the UAE, China, India, Singapore and Kuwait. It imports
mainly from China, the US, Germany, Japan, South Korea and the UAE.
Riyadh usually enjoys a trade surplus, although its scale varies with the fluctuations in
global oil prices. Exports grew rapidly in 2018, aided by rising oil prices, to reach SR1.1
trillion ($294bn). Its imports in 2018 were SR507bn, leaving a surplus of SR597bn, the
highest since 2015.
Saudi imports and exports (SRm)
Source: GSAT
Those wishing to sell products and services to Saudi Arabia are not required to establish
a direct or permanent presence in the kingdom. Instead, they can trade on open account
and deal with Saudi customers by phone and email without even sending an employee
into the country; this is often adequate for small companies and those that do not attach
great significance to the local market. For others, however, the option of establishing a
direct or indirect presence has to be seriously considered to take advantage of the
opportunities the market offers, and to conform to local law.
The simplest way to establish a local presence is by appointing a Saudi company as a
local agent or representative. There is no standard approach to this, although there is a
set of commercial agency regulations that define the parameters of any arrangement.
The first condition is that the Saudi agent or representative is properly incorporated under
the kingdom’s regulations for companies. This entails a Saudi national or corporation
registering with the Commerce & Industry Ministry and other relevant bodies and stating
which activities it wishes to pursue. Foreign firms working with individuals or entities that
are not properly incorporated and registered will quickly discover that few advantages will
be secured by taking this route.
Foreign firms appointing a Saudi company as an agent or representative are free to define
the relationship by contract within the terms of the commercial agencies’ regulations. This
can be registered in a foreign jurisdiction, although it will make the enforcement of
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2013 2014 2015 2016 2017
Imports Exports
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TRUSTED UNIQUE DETAILED
Written by MEEDs experts, with chapters from Colin Foreman,
Andrew Roscoe, Jennifer Aguinaldo, Indrajit Sen. Curated
and reviewed by Richard Thompson.
Includes unique expert analysis of how the market is changing and the impact of
these market changes.
Detailed assessment of the outlook, opportunities and
challenges in all of the major business areas.
"The quality of information provided by MEED Insight enabled us to quickly focus on critical areas as well as providing in-depth research into future opportunities."
300+ pages mega projects 10 key business sectors review on the Vision 2030
SAUDI ARABIA 2019Trends, opportunities and challenges
in the Middle East's biggest market
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Anne BunchConsultancy company based in Dubai
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