Top 5 MENA countries for energy investment
Saudi Arabia, the UAE, Egypt, Kuwait, and Algeria are expected to spend more than any other MENA country on energy projects over the next five years.
1. Saudi Arabia
The Kingdom of Saudi Arabia is expected to invest around $149bn (AED547bn) over the next five years on energy projects. This is more than any other country in the Middle East and North Africa (MENA) region, according to the Arab Petroleum Investments Corporation (APICORP).
Efforts to diversify the economy are underway, but the country is still expected to pump billions of dollars into projects to boost upstream oil initiatives.
Plans to develop its gas sector in order to make it a greater part of the country's burgeoning energy mix are also set to get underway. So too are big-money investments in petrochemical projects.
Two major projects currently planned in Saudi Arabia are the world’s largest oil-to-chemical plant in Jubail, eastern Saudi, and the Yanbu integrated refinery and petrochemicals complex, which will have a capacity of 400,000 barrels per day.
2. United Arab Emirates
With $72bn (AED264bn) of planned investments in the energy sector, the UAE is expected to be the second-biggest spender in the MENA region over the next five years. This is according to data compiled by the Arab Petroleum APICORP, a multilateral development bank focused on the energy sector.
APICORP expect the UAE to make “significant downstream investment” to improve refining and petrochemical production. Plans to pump capital into an upgrade of the Ruwais oil refinery and the Borouge petrochemicals complex suggest the appetite is there to spend wisely on energy projects in the country.
Ground was recently broken on $3.8bn (AED14.2bn) Phase 4 of Dubai's MBR Solar Park, which, when built, will be the world's largest concentrated solar power project.
A new president will be elected in Egypt this month, with voting taking place from 26-28 March. Boosting the country’s economy has become a major part of electoral promises so far, and Egyptians may be pleased to know that Egypt ranks third, behind Saudi and the UAE, when it comes to planned investment in energy projects, according to APICORP's report.
The country is expected to spend around $72bn (AED264), but the problem in the country will be ramping us gas production, hence why APICORP rank Egypt third in the list. Still, major gas development projects are underway, which aim to transform the country into a net gas exporter. Egypt is also expected to increase its renewable energy capacity, with a string of projects in the pipeline that could drive investment in its wind and solar energy industries.
Oil-rich Kuwait is sitting on a pipeline of planned projects in the energy sector worth $59bn (AED216bn), more than half of which is in the oil industry. Thus, Kuwait is expected to be the fourth-leading investor in energy projects in the MENA region over the next five years.
The refining and petrochemical complex at Al-Zour, south of Kuwait City, is expected to go ahead at an estimated cost of $6bn (AED6bn), with contracts set to be awarded in 2019, according to APICORP.
Kuwaiti leaders recently held a high-level meeting with Chinese officials, where both parties spoke about how the Asian superpower could invest in Kuwaiti infrastructure projects. This comes as China has already pumped billions of dollars into its Belt and Road initiative. Kuwait projects China may invest in include Al-Harir City and the development of five uninhabited islands off Kuwait's eastern coast.
Investment in planned energy projects in Algeria stands at $58bn, ranking it fifth on the list.
The development of Hassi Messaoud's peripheral fields is expected to account for a significant proportion of investment, as the country moves to invest more in upstream oil. This is a part of long-term efforts to increase gas and oil production by a fifth.
Downstream energy projects, including the $2.5bn Tiaret Refinery and Hassi Messaoud refinery, will help to reshape Algeria’s energy development programme and provide long-term opportunities for construction contractors with experience in the energy sector.