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The Middle East's top construction contracts of February 2019

Local contractors such as Arabtec and Asian builders like CSCEC and Daelim were among last month's most successful firms

February 2019 was a positive month for construction contract awards [representational image].
© Pixabay / Photo Mix Company
February 2019 was a positive month for construction contract awards [representational image].

Economic diversification programmes are continuing at pace in the Middle East, especially in GCC countries such as Saudi Arabia and the UAE, but February 2019 was a successful month for general, as well as engineering, procurement, and construction (EPC) contractors active in the region.

Major contracts wins were announced by construction companies such as Arabtec (UAE), Acwa Power (Saudi Arabia), and Al Naboodah Construction Group (UAE) in February 2019. However, international contractors were not left behind, and firms such as McDermott (America) and SK Engineering and Construction Co (South Korea) also posted significant orders in February 2019.

The Middle East’s top construction contracts of February 2019 were:

  • KBR-Wison win Satorp contract
  • National Marine Dredging Co’s $1bn Adnoc agreement
  • Orange Business Services’ Al Widyan win in Saudi
  • Arabtec’s $46m Expo 2020 Dubai contract
  • SK Engineering and Construction Co’s Fujairah bunker deal
  • McDermott’s Marjan wins from Saudi Aramco
  • Daelim’s Aramco-Total deal for Saudi’s first PIB plant
  • Galfar’s Punj Lloyd contract in Oman
  • CSCEC’s agreement with Saudi Arabia
  • Al Naboodah Construction Group’s Dubai Airports revamp deal

EPC contractors had a successful February in the Middle East [CW Archives].

1. Sino-American team for Satorp oil refinery works

New York-listed EPC contractor KBR announced in February 2019 that it had won work on a Satorp refinery in Saudi Arabia, which it will develop alongside Chinese subcontractor Wison Engineering.

Satorp, a joint venture of Saudi Aramco and Total, awarded KBR the main contract to debottleneck Train 2 of its Jubail oil refinery.

KBR’s work with Wison is due for completion by August 2020, and when the refinery’s upgrade has been completed, its throughput is expected to grow by 15% over its current production capacity of 440,000 barrels per day.

2. National Marine Dredging Co to build Adnoc islands

In its latest push to expand Ghasha Concession, state-held oil and gas giant Adnoc awarded a $1.3bn (AED5bn) contract to the UAE’s National Marine Dredging Co (NMDC) to build two causeways and 10 artificial islands in Abu Dhabi.

NMDC will work on Adnoc's 10-island project for Ghasha [© Adnoc].

NMDC will build infrastructure to develop, drill, and produce gas from offshore fields to support the growth of Ghasha Concession. At the time of the contract’s award, Adnoc’s group chief executive officer HE Dr Sultan Ahmed Al Jaber, said the NMDC deal would “accelerate the development of the Hail, Ghasha, and Dalma sour gas offshore megaproject”.

Set to employ more than 3,500 people at the peak of construction, NMDC’s project includes dredging, land reclamation, and marine construction, all of which will be delivered over 38 months.

3. Al Widyan gets smart with Orange

A 700ha smart city is set to be built in Saudi Arabia’s capital, Riyadh, after developer al Widyan Saudi Real Estate Co awarded a contract of unspecified value to Orange Business Services for its upcoming development, Al Widyan.

Orange will deliver an ‘unobtrusive’ smart city model for the project, and “define smart city services”, as part of its contract with the developer, Al Widyan Co. The real estate company is part of Al Akaria Real Estate Co which, in turn, is two-thirds held by Saudi Arabia’s PIF.

In a statement announcing its contract win in February, Orange Business Services – which has also worked on Saudi Arabia’s Jeddah Economic City and King Abdullah Financial District – said it would develop a smart city digital masterplan for Al Widyan, which will include “a range of seamlessly integrated solutions for businesses”, as well as features to support mobility, improved traffic management, and enhanced city operations.

4. Arabtec's Expo 2020 Dubai portfolio grows

Listed UAE construction giant Arabtec Holding reported a $46m (AED169m) contract award from Expo 2020 Dubai in May 2019. As part of the deal, Arabtec Construction – a unit of the bulding company – will develop the public realm space within Expo 2020 Dubai’s C38 District, located close to Al Wasl Plaza.

The 13-month contract’s works were due to begin immediately, and Arabtec said it would build 29,000m2 of public spaces – including a 5,000m2 “iconic water feature – as part of its agreement.

Arabtec’s February 2019 contract win builds on its Expo 2020 Dubai portfolio, which already includes a $85m (AED311m) contract to build arrival plazas and public realm concourses at the World Expo’s site.

5. World’s largest underground oil bunker in UAE

A South Korean construction company was officially named contractor for Adnoc Fujairah Underground Storage – the largest facility of its kind in the world – that is to be built in Fujairah. SK Engineering and Construction Company (SKEC) was awarded the $1.2bn (AED4.4bn) EPC contract on the side-lines of an official visit to Seoul by HH Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.

HH Sheikh Mohammed and South Korea’s President Moon Jae-in oversaw the contract’s signing ceremony, with the deal inked by Adnoc’s Al Jaber and SKEC’s president and chief executive officer, Jae Hyun Ahn, at Blue House.

SKEC will build three underground storage caverns, each with a capacity for 14 million barrels of crude oil, under the Adnoc contract. Work on the Fujairah development started in 2018, with Phase 1, which included the development of an access tunnel, completed as of February 2019. Adnoc Fujairah Underground Storage is due for completion in 2022.

6. McDermott wins Marjan work from Aramco

With billions of dollars’ worth of investment to be pumped in over half a decade, the Marjan oil field is undoubtedly among the largest energy schemes not only in Saudi Aramco’s portfolio, but indeed across the kingdom.

Two significant contract wins associated with the Marjan megaproject were announced in late-February 2019 by American contractor McDermott. The company won an EPC and installation contract from the state-held Aramco for the establishment of a 65km offshore pipeline that will serve a tie-in platform at Marjan. McDermott defined this deal as a ‘substantial’ contract, adding that its value was between $500m and $750m.

Aramco awarded various EPC contracts last month [© Saudi Aramco].

McDermott added at the time that it had won another EPC and installation contract – a ‘large’ agreement worth between $50-250m – for the upgrade of two platforms at Marjan. As part of this contract, the American company will install equipment for electrical submersible pumps at the oil field.

7. Daelim to build Saudi’s first PIB plant

Adnoc’s contract made SKEC an immensely popular South Korean construction company in the region last month, but it was not the only organisation from the Asian country to bag work in the Middle East. Early in February 2019, Daelim announced that it had signed a memorandum of understanding with Saudi Aramco and France’s Total to build Saudi Arabia’s first factory for the manufacture of polyisobutylene (PIB), a chemical that is used for industrial production.

Front-end engineering and design work for the project is due to complete in Q4 2019, and the Daelim-built project is to be completed in 2024.

Upon completion, Saudi Arabia’s first PIB plant will produce more than 70,000 tonnes of the material, which will be exported across Asia, Europe, and the Middle East for applications in the adhesive, lubricant, and fuel additive industries.

8. Oman’s Galfar scoops Indian Punj Lloyd’s contract

Galfar Engineering & Contracting, a Muscat-listed Omani contractor, continued its successful start to 2019 by picking up work on a project within the Fahud-Sohar pipeline scheme.

With a subcontract worth $1.9m (OMR753,000), Galfar will work with Indian main contractor Punj Lloyd to erect and install 36.5cm of piping for the Fahud-Sohar pipeline’s natural gas liquid component.

Project completion is due within three months, Galfar’s chief executive officer, Dr Hans Erlings, said in a missive issued to the Muscat bourse in February.

9. Chinese contractor to build Saudi citizen homes

Saudi Arabia’s National Housing Company (NHC) awarded a $666.7m (SAR2.5bn) contract to China State Construction Engineering Corp (CSCEC) for the construction of 5,600 homes.

CSCEC’s agreement with Saudi Arabia was signed on the side-lines of the official visit to China by Saudi Arabia’s Crown Prince, Deputy Prime Minister, and Minister of Defence, HRH Mohammed Bin Salman.

As part of the contract, CSCEC will build apartments and townhouses under the 270ha ‘Murcia’ scheme on a Ministry of Housing land plot in northern Riyadh.

10. Al Naboodah to revamp DXB runway

Set to impact hundreds of international flights operated by numerous global airlines, Dubai Airports’ upcoming revamp of Dubai International Airport’s (DXB) southern runway is a critical upcoming project in the city. Understandably, the contractor working on the scheme must also be well-versed with the size and scale of the project, and as Senan Al Naboodah said in February 2019, Al Naboodah Construction Group (ANCG) is ready for the “high-intensity” job.

ANCG announced last month that it would implement the DXB renovation programme that will run between 15 April and 31 May 2019, with the live airfield scheme to see flights being diverted to sister site Al Maktoum International Airport during the 45-day period.

ANCG was awarded the DXB upgrade contract [representational image].

Upgrade work at DXB – which is the world’s busiest airport by passenger traffic – will include runway resurfacing, replacement of inset runway lights, and component laying with a focus on control tower-connections.

Commenting on the contract last month, ANCG’s managing director, Al Naboodah, said: “DXB is a central hub for activity and our renovation project will need to be a high-precision, hour-by-hour operation, with standby resources available for every item of major plant and equipment.”

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