q3 2021 projects market analysis

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Q3 2021 Projects Market AnalysisAnd outlook for Q4 and beyond

MEED Projects Webinar14 October, 2021

Ed James, Director of Content & Analysis, MEED [email protected]

1. Introduction

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MEED Projects is a Middle East, North and East Africa projecttracking platform. It has two major functions; it is a businessdevelopment tool to help you find new businessopportunities and an analysis tool so you can assess thefeasibility of potential new markets and projects.

5 key reasons to sign up for a demo:

• Identify new business opportunities from over 15,000 activeprojects worth over $7 trillion

• Improve performance in current markets and evaluate newmarkets with 20 countries covered

• Build the right company relationships using our database of over30,000 companies on live projects

• Target over 40,000 key decision makers ahead of yourcompetitors

• Forecast market developments by country and project type toinform your strategic planning

www.meedprojects.com

http://www.meedproject.com/

2. 2020 Review

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2020 PerformanceThe market has been in decline since the fall in oil prices in 2014. Last year accelerated this fall due to the COVID-19 pandemic. As a result, the MENA projects market had its worst year in two decades.

Source: MEED Projects

Value of MENA contracts awarded, 2010-2020 ($m)

24% fall in contract awards in 2020 compared with 2019

6

Impact of COVID-19However, not all countries were as affected as much as others. The UAE and Saudi Arabia were worst hit, falling respectively 32% and 53% of their 2019 performance, but markets like Qatar, Egypt, Oman, Kuwait and Algeria were fairly stable year-on-year and in some cases even grew on last year’s numbers


Value of MENA contracts awarded by Country, 2019-20 ($m)

7

Impact of COVID-19

The gas, petrochemical and construction sectors were particularly badly hit last year. However, it was not the same story across all sectors as the transport and power segments actually grew year-on-year despite the coronavirus.


Value of MENA contracts awarded by Sector, 2019-20 ($m)

8

Project Realisation

2020 saw a big fall in projects moving from bid to executionOther project stages not so much impacted


Analysis of project realization 2019 vs. 2020 based on projects on 1 January

2019

Status Project Counts

Projects moved to execution in calendar

year %

Bid Evaluation 667 590 88%

Design 1031 139 13%

FEED 180 16 9%

Main Contract Bid 307 71 23%

Main Contract PQ 405 34 8%

On Hold 2316 360 16%

Study 1442 91 6%

2020

Status Project CountsProjects Moved to

Execution in calendar year %ge

Bid Evaluation 713 412 58%

Design 1049 140 13%

FEED 276 22 8%

Main Contract Bid 256 34 13%

Main Contract PQ 371 21 6%

On Hold 2522 275 11%

Study 1470 86 6%

3. Q3 2021 Review

10

2021 YTD PerformanceThe market has been in decline since the fall in oil prices in 2014. Last year accelerated this fall due to the COVID-19 pandemic. As a result, the MENA projects market had its worst year in two decades.


Value of MENA contracts awarded, 2010-2021 YTD ($m)

11

2021 YTD Performance

2021 Performance Still SluggishQatar market showed remarkable growth, however


MENA contract awards 2021 YTD

0

5,000

10,000

15,000

20,000

25,000

Saudi Arabia UAE Egypt Qatar Iraq Morocco Oman Kuwait Bahrain Algeria

2021 YTD

12


Most countries have beaten or will beat last year’s numbersThe UAE is a notable exception


Comparison of MENA contract awards 2019, 2020 and 2021 YTD

0

10,000

20,000

30,000

40,000

50,000

60,000

Saudi Arabia UAE Egypt Qatar Iraq Morocco Oman Kuwait Bahrain Algeria

2019 2020 2021 YTD

13


Some sectors have performed better than othersHowever, construction continues to decline


Comparison of MENA contract awards 2019, 2020 and 2021 YTD by sector

14

Q3 2021 Performance

Q3 2021 was slowTends to be the quietest quarter of the year


Comparison of GCC contract awards Q3 2019, 2020 with Q3 2021

0

5,000

10,000

15,000

20,000

25,000

30,000

Saudi Arabia UAE Egypt Iraq Qatar Oman Kuwait Morocco

2019 2020 2021

15

Top Q3 2021 Projects

A Good Spread Across all Countries and SectorsIraq refineries

Project Country Value ($m)Ministry of Oil - Al Fao Oil Refinery Iraq 1,500Agence Nationale des Ports - Dakhla Atlantique Port Complex Morocco 1,384TDIC / Guggenheim Foundation - Saadiyat Island: Guggenheim Abu Dhabi Museum UAE 1,000NRC - Kirkuk New Refinery Iraq 905Al Masane Al Kobra Mining Company - Moyeath Copper & Zinc Processing Plant Saudi Arabia 640NOC - Gallaf Batch 3: EPC-06 Qatar 635SWCC - Jubail Desalination Plant Upgrade Phase 2 Saudi Arabia 560DGDA - Wadi Safar Developments: Infrastructure Works for East and West Areas Saudi Arabia 533Saudi Aramco - MGSE: Residential Compounds at East and West Pump Stations Saudi Arabia 500Qatargas - RLTO and Offplot Facility (EPC-3) Qatar 500Qatar Petroleum - New Gasoline and Jet Storage Facilities in MIC Qatar 500URC - Assoufid Mixed-Use Development Morocco 400QIC - The Qiddiya Project: Public Utilities Infrastructure Package Saudi Arabia 400NICICO - Phosphoric Acid Plant Iran 320NOC - Gallaf Batch 3: EPC-05 Qatar 320Tatweer Petroleum - Well Head Compression For Non-Associated Gas Wells Bahrain 294ASHGHAL - Qatar Public Private Partnership Schools Development: Package 2 Qatar 264EETC/SEC - Saudi Egypt Power Interconnection: Submarine/Land Cable Saudi Arabia 256KOC - KERP: South Kuwait Excavation Transportation & Remediation Project: Zone-3 Kuwait 251Sirjan Gohar Energy Company - Golgohar 2 Combined Cycle Power Plant (546 MW) Iran 240

Selected MENA projects awarded in Q3 2021

MEED Projects

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Top Q3 2021 Projects

MEED Projects

Project Country Value ($m)EETC/SEC - Saudi Egypt Power Interconnection: 500 kV S/S (Lot SC1,SC2,SC3) Saudi Arabia 240MoT - New Alamein Station and Wadi El Natroun Station Egypt 240Air Products Qudra - Jubail Industrial Gases Hub Saudi Arabia 240SONEDE - Seawater Desalination Plant in Sfax (IWP) Tunisia 235DOS - New Embassy Compound Qatar 229Union Properties - Motorcity: Motor City Views UAE 218HIB - Tripoli Third Ring Road Libya 210ADNOC Onshore - Al Dabbiya Thamama B Transition Zone: Phase 2 UAE 187SWCC - Shoaiba - Al Quwaiza Water Transmission Pipeline Saudi Arabia 186Peacock Energy Company - 120MW Gulf of Suez Wind Power Plant Egypt 180NAT - High Speed Rail Network: Roads and Bridges Egypt 176OQ - Central Rich and Lean Gas Segregation Project Oman 170Cotton and Textile Industries Holding - Textile Manufacturing Complexes Egypt 166Deyaar - Business Bay: Regalia Tower Residence (Plot No: 3466861) UAE 163NHC - Al Mashraqiya Housing Complex in Riyadh Saudi Arabia 160NIGC - Ilam Gas Refinery: Phase II Iran 160SWPC - Madinah 3 ISTP Saudi Arabia 160MAF - Dubailand: Tilal Al Ghaf: Harmony Villas UAE 160Barwa – Al Janoub Residential Development in Al Wakrah: STP Qatar 160

Selected MENA projects awarded in Q3 2021

UAE and KSA show resurgenceOil, gas and power projects were strong

4. Short-term Outlook

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Q4 Projects in Bid

A Total of $43.5bn of Projects in BidSaudi Arabia has by far the biggest short-term pipeline


Value of MENA tenders issued or under evaluation ($m)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Saudi Arabia UAE Qatar Oman Egypt Iran Jordan Kuwait Algeria Iraq

19

Full-year 2021 Outlook

Qatar Expected to be Largest Market for First TimeUAE will continue decline


Anticipated full-year 2021 contract award totals ($m)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Qatar Saudi Arabia Egypt UAE Algeria Oman Kuwait

Value of work awarded 2021 YTD Value of work under evaluation

2019 Total = $149bn2020 Total = $113bn2021 Actual plus under evaluation = $127bn

20

Full-year 2021 Sector Outlook

Most Sectors to Grow Year-on-YearConstruction to be overtake for first time


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Gas Construction Transport Power Oil Water Chemical Industrial

2021 YTD Value of work under evaluation

Anticipated full-year 2021 contract award totals by sector ($m)

21

Projects in Bid

Plenty of opportunities across the regionEvery market has something for everyone


Selected MENA projects under bid evaluation

Project Country Value ($m)ADNOC/ADPower - Sub-Sea Power Transmission Network UAE 2,000SIDPEC - Alexandria Polypropylene Plant Egypt 1,700ADNOC/Total/PetroChina/ENI - Umm Shaif Gas Cap Condensate Development: Phase 1 UAE 1,500Total - Marsa LNG Terminal Oman 1,000Sonatrach/ENI - Upgrade of CTH BRN Gas Pipeline Algeria 500Sonatrach - Arzew Petrochemical Complex CP1Z Expansion Algeria 500SABIC - PK Cluster Petrochemical Plant Saudi Arabia 500Saudi Aramco - Dew Point Control System (DPCU) at Abqaiq NGL Plant Saudi Arabia 500QAPCO - Poly Vinyl Chloride (PVC) Plant Qatar 500Iranian Central Oil Fields Company - Halgan Field Development Iran 500Saudi Aramco - PDMs at Ribyan and Zuluf Offshore Oil Fields (CRPO 84) Saudi Arabia 440Seven Seas Co - Integrated Cement Plant in Duqm Oman 435The Galleria Investments - City Tower 1 Redevelopment UAE 408Saudi Aramco - Expansion of NGL Facilities at Juaymah Terminal (CRPO 78) Saudi Arabia 380ENI - Provision of Water Lines Network Installation Iraq 350Saudi Aramco - DHDT unit in Ras Tanura Refinery Saudi Arabia 350MoT - Helwan-Port of El-Sokhna to El Alamein Railway Freight Corridor Egypt 338

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Projects in Bid

Plenty of opportunities across the regionEvery market has something for everyone



Project Country Value ($m)MPW - Northern Regional Road from Crossroad No.82 To Crossroad No.58 Kuwait 330Oman Ministry of Tourism - Oman Gate in Al Seeb Oman 311RSNF - Marine Docks Project and Ship Repair Facility Saudi Arabia 300PetroChina - Oil Treatment System Upgrading CPF-1 Iraq 300PetroChina Company Limited - Water Injection and 19 Tie-Ins Iraq 300MPW - Northern Regional Road from Crossroad 58 to Salmi Border Check Post Kuwait 300ROSHN - Community Homes in Al-Kharj Saudi Arabia 300DEWA - Jebel Ali K Power Station: Phase 3 UAE 300SWCC - 380 kV Central Transfer Station in Jubail Saudi Arabia 300LCEC - Concentrated Solar Power Plant 50 MW in Hermel Lebanon 300QAF - Land Forces HQ and Accommodation Facility in Doha Qatar 275Aldar - Noya Residential Community UAE 256ADNOC Onshore - BAB Facility Upgrade Project UAE 250DEWA - Glass Reinforced Epoxy Water Transmission Pipelines (2132100031) UAE 250ASPC - 500MW PV Power Plant in Kom Ombo Egypt 200King Faisal Specialist Hospital - Staff Accommodation facility Saudi Arabia 200SEC - 380kV D/C OHTL Between New Tabarjal BSP To Buhirah BSP Saudi Arabia 200

5. Long-term Outlook

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Economic Growth

Most countries in region forecast to rebound strongly from CovidEgypt market by far and away the strongest performing

-10

-8

-6

-4

-2

0

2

4

6

8

10

UAE Saudi Arabia Qatar Egypt Kuwait Oman Bahrain

2020 2021 2022 2023 2024 2025

MENA real GDP growth 2020-2025 (%)

Source: GlobalData

25

Long-Term Projects Market Drivers

Key Drivers for Investment in ProjectsMultiple factors at play

High population growth drives need

for projects

Energy Transition into the Hydrogen

Economy

Aging existing Infrastructure and need to increase

capacity

Belt and Road Initiative has seen sharp growth

in infrastructure projects

Long-term government visions such as Saudi 2030

1 2

3

4

Energy independence,

renewables and gas developments

Economic and population growth

requires investment in power and water

capacity

7

Project MarketDrivers

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Hydrogen Projects

A raft of new project announcements over past 12 monthsDuqm and Kizad each have at least 2 projects



Project Country Value ($m)EEHC/EGAS - Green Hydrogen Facility Egypt 4,000

OQ/ICE/Enertech - 25GW Green fuel Project Oman 3,000

SEZAD/ACME - Green Hydrogen & Ammonia Facility Oman 2,500

ACWA Power/NEOM/Air Products - Helios Green Fuels Project Saudi Arabia 1,920

Oman Ministry of Oil and Gas - Hyport Duqm Oman 1,000

Helios Industry - Green Ammonia Facility at Kizad UAE 1,000

ADPC/TAQA - Kizad: 2GW Green Hydrogen to Ammonia Plant UAE 3,000

MoEM - Green Ammonia Facility Morocco 850

Taziz/Fertiglobe - Taziz: Blue Ammonia Production Facility UAE 500

TAQA/ESI - Green Hydrogen Plant UAE 200

TAQA Arabia - Green Hydrogen Project in Egypt Egypt 200

Beeah - Waste to Hydrogen Plant in Sharjah UAE 180

SWCC/Cummins - Hydrogen Gas Production Plant Saudi Arabia 150

Sumitomo Corp/ARA Petroleum - Hydrogen Production Facility Oman 100

Abu Dhabi Future Energy Company - Masdar City: Green Hydrogen Demonstrator Plant UAE 50

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Key Challenges

Key Challenges for Investment in ProjectsMany inherent issues

Delayed payments and general cashflow and funding requirements – contractors and suppliers report constant challenges around prompt payments

Slow decision making – the market is recovering, the decision-making time on projects going to market and being awarded is as long as it has ever been caused by the uncertainty of Covid.

Shrinking market – although recovering, the market is still smaller than it was in 2015

Raw material costs – 2021 has seen a remarkable rise in logistics and raw material costs caused by the pandemic

Localisation rules – increasing focus on where companies have their regional HQs and from where they procure manpower and equipment

Increasing competition – as work opportunities have shrunk over the last few years, the amount of competition generally has increased impacting margins

Looming potential crunch in Saudi Arabia as ramp up of PIC projects accelerates

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Key Challenges

Key Challenges for Investment in ProjectsMany inherent issues

281

172

569

0

100

200

300

400

500

600

Work awarded 2011-15($bn)

Work awarded 2016-21($bn)

Work due to be awarded2021-25 ($bn)

Value of KSA projects awarded 2011-21 vs 2021-25 ($bn)

Project Completion dateRemaining Work Value ($bn)

Value of work to be awarded 2021-25 ($bn)

ROSHN 2030 89 45Neom 2040 498 125TRSDC 2024 (1st phase) 13.6 6.8Amaala 2024 1 1Madinah al Rua 2030 10 5SEVEN 2025 4.9 4.9Qiddiya 2024 5.2 5.2Arabian Highland 2030 13 6.5TOTAL PIF NA 635 199TOTAL OTHERS NA 546 370TOTAL ALL NA 1,180 569

Diriyah Gate to award $8.9bn in 2022 Roshn $42bn by 2025 NWC $38.7bn by 2025 FDI targets of $103bn annually to 2030

Does the kingdom have the logistical, manpower, engineering and contractual capacity to deliver these ambitious spending programs in such a short timeframe?

Recent News Headlines


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Future Pipeline

More than $3.5 trillion worth of projects planned and un-awarded in the MENA regionSaudi Arabia has by far the biggest pipeline led by Neom


Value of known planned and un-awarded MENA projects ($m)

30

Future Pipeline

Construction Remains the Largest Future SectorConstruction represents 56 per cent of MENA’s future pipeline


Value of known planned and un-awarded MENA projects by sector ($m)

Chemical, 160291, 5%

Construction, 1986646, 56%

Gas, 214269,

6%

Industrial, 86639, 2%

Oil, 235811, 7%

Power, 299382, 8%

Transport, 493412, 14%

Water, 84189, 2%

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Longer-Term Forecast

MENA Market in Global ContextRegion is expected to grown 25% between 2020 and 2025

Global Construction Output Value (Real, 2017 US$ billion), 2019 and 2024

4,387 4,469 4,774 4,986 5,165 5,353 5,549

448 413446 480 510 541 573

641 570632

684 728772

820

199 193199

208215

222228

479 454475

496519

542567

208 197204

216227

240254

1,854 1,8761,912

1,9712,016

2,0602,105

546 460505

533552

568585

2,146 2,0082,122

2,1792,226

2,2722,320

668661

678707

736767

799

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2019 2020 2021 2022 2023 2024 2025

Eastern Europe

Western Europe

Latin America

North America

Sub-Saharan Africa

Middle East andNorth Africa

Australasia

South Asia

South-East Asia

North-East Asia

Source: GlobalData

32

Long-term projects

Project pipeline is across multiple sectors and marketsSome projects will not happen, but pipeline is significant regardless


Selected longer-term MENA projects

Project Country Value ($m)ACUD - Entertainment District in Egypt Egypt 20,000KAPP / PART - Kuwait City Metropolitan Rapid Transit (MRT) Kuwait 18,000ADNOC/Eni/OMV - New Refinery UAE 15,000PAHW - Al Khiran Residential City Development Kuwait 13,900PTA - Saudi Land Bridge Saudi Arabia 10,600Egypt Ministry of Petroleum - Salamat Field Egypt 10,200Bahrain Airport Company - New Bahrain International Airport Bahrain 10,000ECHEM - Alamein Petrochemical Complex Egypt 8,500Ministry of Industry & Minerals - Nebras Petrochemical Complex Iraq 8,000ADPC - Kizad: Phase 2 UAE 7,800RSNRP- Crude Oil Refining and Petrochemical Complex in Ain Sokhna Egypt 7,500ARADA - Mixed Use Development Saudi Arabia 6,500ICOFC - Tous Gas Field Development Iran 6,000Sonatrach - Bled El-Hadba Phosphate Plant in Tebessa Algeria 6,000Ministry of Construction & Housing - Nahrawan Residential Development Iraq 5,000PAHW - Subiya Urban Development (Al-Sabriya Project) Kuwait 5,000TM - Taif Public Transport Network Saudi Arabia 5,000Q-Chem - Ras Laffan Petrochemical Complex Qatar 5,000PDO - Habhab Field Service Contract (C311790) Oman 5,000Taziz - Petrochemical Derivative Complex in Ruwais UAE 5,000

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Thank you

Ed James, Director of Content & Analysis, MEED Projects, [email protected], Tel: +97150 661 4048

mailto:[email protected]

q3 2021 projects market analysis

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