Qatar expected to award $31bn worth of projects this year
Qatar, which powered the projects market in the Gulf region through its mammoth $13bn gas expansion contracts in the first quarter (Q1), is expected to award as much as $31bn worth of projects this year, according to Kamco.
Finding that the GCC or Gulf Co-operation Council region saw the normal seasonal spike during Q1-2021 with project awards more than doubling to $26.3bn against that in fourth quarter of 2020; it said "the growth came mainly on the back of a quarter-on-quarter increase in project awards in Qatar and Kuwait, while the rest of the GCC countries reported declines."
After witnessing declines over the last several quarters, the GCC project market showed "healthy" recovery during Q1, 2021 on a quarterly basis.
Of the $26.3bn projects awarded in the GCC during Q1, 2021; the gas sector saw as much as $17.83bn or 68% of the total, followed by construction ($3.18bn or 12%), power ($1.61bn or 6%), transport ($1.57bn or 6%), water ($1.28bn or 5%), oil ($0.61bn or 2%) and industrials ($0.22bn or 1%).
When compared to Q1, 2020, only Qatar reported a growth in project awards that however showed a smaller decline at the aggregate GCC level at 3.5%, the report said.
"The higher number for Qatar mainly reflects the $13bn award for the Qatargas – LNG (liquefied natural gas) processing trains project," it said.
The Kamco report said the value of projects planned and under execution in the GCC has remained around the $1.7tn mark since 2017.
Expecting the contract awards to reach five-year high in 2021; it said with year-to-date awards at $33.1bn, "the full year is expected to be promising in terms of project market activity in the GCC."
According to MEED projects, $114bn worth contracts are expected to be awarded this year, which is more than three times the size of contract awards in 2020 and double the awards in 2019.
"The significant increase is expected to come from pending projects from last year as well as an accelerated of diversification efforts in the GCC," Kamco said, adding the increasing pace of vaccinations in the region and the expected easing of Covid-19 related restrictions are expected to further boost business confidence and encourage investment in new projects.
Saudi Arabia is expected to be the biggest market for new contract awards of $35bn by year end, followed by Qatar and the UAE at around $31bn and $28bn, respectively, Oman at little over $10bn and Kuwait at around $9bn in new projects.
The need to develop non-oil sectors is apparent in the project pipeline for the GCC countries, Kamco said, quoting MEED Projects that found construction accounts for the bulk of the GCC project pipeline at 65% or $1.5tn of the total $2.4tn.
In terms of the stage of the projects, around $1.7tn worth of projects is under the design stage followed by $408bn in the study phase.
Credit to m.gulf-times.com