Value of awarded contracts in KSA reaches SR82.8bn in Q2

Updated 06 October 2015
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Value of awarded contracts in KSA reaches SR82.8bn in Q2

JEDDAH: There was a significant upswing in the value of awarded contracts in Saudi Arabia during the second quarter of 2015 as it reached SR82.8 billion. It marked a strong rebound from the previous quarter. Anchor sectors took hold of the majority of spending, as the roads and residential real estate accounted for approximately 57 percent of the total value (SR47.5 billion), according to NCB Construction Contracts Index Second Quarter 2015 released on Tuesday.

The report said power sector came third, with 14 percent of the value of awarded contracts during Q2, 2015. Beyond the roads and residential real estate sectors, the value of awarded contracts were varying across the remaining sectors during Q2, 2015. The value of awarded contracts in April jumped to SR51.3 billion, which had the highest monthly value of awarded contracts during Q2, 2015.
Despite falling oil prices, and accordingly oil revenues, the construction awarded contracts in the first half 2015 showed a higher pace than 2014, but likely to weaken in 2016. Furthermore, with the prospect of recording twin deficits in 2015, government’s large foreign reserves held by SAMA (Saudi Arabian Monetary Agency) should provide enough cushion to sustain an elevated level of spending during 2015 and beyond.
The NCB report said value of awarded contracts during H1, 2015 surpassed that of H1,2014 by 13 percent, reaching SR140 billion. The SR82.8 billion in awarded contracts during Q2, 2015 reflects the continued strength of the construction industry and also shows that the Kingdom can afford to keep spending close to its recent past levels, even at lower oil prices. Following the pattern of 2014, the physical and social infrastructure related projects continued their growth in Q2, 2015, with fewer of industrial mega projects.
The Construction Contracts Index (CCI) increased to record 341.98 points by the end of the second quarter of 2015, from 290.78 points recorded at the end of the first quarter of 2015, which was at the same level recorded in Q3, 2014. The CCI gradually rose from 305.11 in April to 325.76 and 341.98 points in May and June, respectively.
The concentration of contracts within the roads sector in the Makkah region, which had 42 percent share, witnessed a sizeable road project that was awarded by Umm Al Qura for Development & Construction, amounting to SR23.3 billon. Riyadh region captured 18 percent share of the total value of awarded contracts during Q2,2015. Riyadh also was the recipient of three roads contracts that were awarded by Arriyadh Development Authority.
The Jazan region came third (9 percent), as this share was attributed to the SR7.1 billion IGCC power plant contract that was awarded by Saudi Aramco.
The value of awarded contracts showed an increase in April, reaching SR51.3 billion. The roads, power, residential real estate, and industrial sectors were the largest contributors. Seven major contracts were awarded in the roads sector. The largest contract amounting to SR23.3 billion was awarded by Umm Al Qura for Development & Construction to Dallah Albaraka Group.
The second contract, which worth SR6.6 billion, was also awarded by Umm Al Qura for Development & Construction to Nesma & partners.
The third contract was awarded by Ministry of Transportation to Bin Tamy Saudi Pan in the amount of SR225 million for Taif, Al Baha and Abha road expansion, and implementation of service roads on both sides: Makkah Part (20km) and Taif Ring Road phase 4 (8km). The project is expected to be completed by the second quarter of 2018.
Within the power sector, three major contracts were awarded. The largest contract in the amount of SR7.1 billion was awarded by Saudi Aramco to JV of Air products & Acwa Holding to build multiple power plants. The current project deals with the construction of an air separation unit of the new IGCC power plant at Jazan refinery, which is the world largest industrial gas complex, to supply 75,000 metric tons per day (20,000 oxygen and 55,000 nitrogen).

The project is expected to be completed after 23 months. The second contract worth SR450 million and was awarded by Saudi Electricity Company (SEC) to Archiorodon for building a power plant named PP13 at Riyadh. The third contract was also awarded SEC at SR450 million to Al-Gihaz Holding to build Tabuk substation 380/kv, and associated facilities. The two projects are expected to be completed by 2016.
Within the residential real estate sector, three major contracts were awarded. The largest contract in the amount of SR5.2 billion was awarded by the Ministry of Interior to El Seif Engineering Contracting to build a residential compound in Najran – residential compound with 2800 residential units, which include 337 apartment buildings. The project is expected to be completed by the second quarter of 2018.
The second and third projects in the amount of SR750 mil- lion, and SR375 million were awarded by the Ministry of Hosing to Emdad Najed Group for constructing residential units, which include 985 apartments, 192 sqm each). The two projects are expected to be completed by the second quarter of 2018.
Within the industrial sector, three contracts were awarded. The largest EPC contract in the amount of SR1.08 billion was awarded to Taiwan’s CTCI and Japan’s Chiyoda Corporation by the Local National Industrial Company (Tasnee) to build a titanium sponge plant. The project is expected to be completed by the first quarter of 2017. The second contract was awarded to China National Building Materials Company by Arabian Cement Company in the amount of SR363.8 million. The objective of this project is the expansion of Rabigh Cement Plant. The project is expected to be completed by the second quarter of 2016.


‘Fuel of the future’ comes of age as Aramco opens first hydrogen filling station

Updated 17 June 2019
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‘Fuel of the future’ comes of age as Aramco opens first hydrogen filling station

  • Fatih Birol’s comments were a deliberate poke at those experts who think that the sheer logistics of hydrogen make it always an unlikely solution to global energy challenges
  • Birol’s article was followed by a report from the IEA that put some meat on the bones of the argument that hydrogen is key to solving problems such as global warming

DUBAI: Fatih Birol, executive director of the International Energy Agency, cracked a joke in the Financial Times a couple of weeks ago.
“Hydrogen is the fuel of the future, and it always will be,” he wrote about the fuel that many experts agree could hold the key to the world’s energy problems.
It was a deliberate poke at those experts who think that the sheer logistics of hydrogen — generation, storage, and transportation — make it always an unlikely solution to global energy challenges.
Birol’s article was followed by a report from the IEA that put some meat on the bones of the argument that hydrogen is key to solving such problems as global warming and environmental degradation.
“The world has an important opportunity to tap into hydrogen’s vast potential to become a critical part of a more sustainable and secure energy future … The world should not miss this unique chance to make hydrogen an important part of our clean and secure energy future,” the report said.
That argument will get a critical boost today, when Saudi Aramco, the biggest oil company in the world, opens its first hydrogen fueling station in Dhahran Techno Valley, in the heart of the Kingdom’s oil producing region.
Aramco has partnered with Air Products, a US company that has been a pioneer in the use of industrial gases, to produce a filling station for hydrogen-fueled vehicles.

 

It is very much a test. “The collected data during this pilot phase of the project will provide valuable information for the assessment of future applications of this emerging transport technology in the local environment,” Aramco said when the project was first announced.
But it is something Aramco has been investigating for a long time. Ahmed Al-Khowaiter, Aramco’s chef technology officer, said: “The use of hydrogen derived from oil or gas to power fuel cell electric vehicles represents an exciting opportunity to expand the use of oil in clean transport.”
Hydrogen — essentially what is left when you take the oxygen out of water — has been recognized as a potential fuel source for many decades. Motor manufacturers developed a hydrogen motor engine 50 years ago, but the ease and accessibility of hydrocarbon fuels — oil, gas and coal — made it uneconomic to develop this technology beyond the prototype stage.
Now, as the debate over the role of hydrocarbons in the global environmental balance has become ever more intense, some experts, including Birol and other influential parts of the thought-leadership establishment, believe hydrogen is the next Big Thing in global energy trends.
The World Economic Forum (WEF) said recently that “green” hydrogen offers a solution to the world energy challenge, and that is the problem the theoreticians are struggling with: Hydrogen is released naturally in the process of burning hydrocarbons, but it is self-defeating, in an environmental sense. if you have to burn oil, gas or coal to produce it.
On the other hand, renewable sources, like sun, wind and water, do not produce enough hydrogen to be practically or commercially viable, and not at the right times, when people actually need it.
But, as the WEF noted recently “low-cost green hydrogen is coming”, as technology advances mean the cost of renewable energy falls dramatically each year. The Middle East already has a very big and very cost-efficient program for solar energy generation.
The other challenges lay in how to store and transport hydrogen. It can be loaded onto a tanker like LNG, or pushed through pipelines, but it would require a huge investment to change current logistics systems — essentially designed for oil and LNG — to handle hydrogen.
Many countries, including Saudi Arabia, already have the infrastructure associated with oil and gas refining and petrochemicals production to be able to equip “hydrogen hubs,” as long as there is government will and commercial incentive to do so.
For the Kingdom, it looks like a no-brainer for the future. As Birol said: “So, hydrogen offers tantalising promises of cleaner industry and emissions-free power. Turning it into energy produces only water, not greenhouse gases. It’s also the most abundant element in the universe. What’s not to like?”

FACTOID

Technological advances mean low-cost ‘green’ hydrogen offers a solution to the world energy challenge, according to the World Economic Forum.