Qatar, which supported the projects market in the region with its $13 billion gas expansion contracts in the first quarter (Q1) of 2021, is estimated to award about $31 billion worth of projects this year, according to the asset management firm, Kamco.
In the first Q1 2021, the GCC region witnessed a surge in project awards, which more than doubled to $26.3 billion when compared to the fourth quarter of last year and this growth was mainly driven by Qatar and Kuwait.
The GCC project market showed a healthy recovery during Q1, after witnessing declines over the last several quarters. Out of $26.3 billion projects awarded in the GCC, the gas sector saw as much as $17.83 billion, followed by construction ($3.18 billion), power ($1.61 billion), transport ($1.57 billion), water ($1.28 billion), oil ($0.61 billion) and industrials ($0.22 billion).
When compared to Q1 of last year only Qatar reported a growth in project awards that however showed a smaller decline at the aggregate GCC level at 3.5 percent. “The higher number for Qatar mainly reflects the $13 billion award for the Qatargas LNG processing trains project,” the report said.
According to MEED Projects, $114 billion worth of contracts is 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 acceleration of diversification efforts in the GCC,” Kamco said. The increasing pace of vaccinations in the region and the expected easing of COVID-19 related restrictions will further boost business confidence and encourage investment in new projects.
Saudi Arabia is expected to be the biggest market for new contract awards of $35 billion by year-end, followed by Qatar and the UAE at around $31 billion and $28 billion, respectively, Oman with about $10 billion and Kuwait at around $9 billion in new projects.
The need to develop non-oil sectors is evident in the upcoming project for the GCC countries, Kamco pointed out, quoting MEED Projects that found construction accounts for the bulk of the GCC project pipeline at 65 percent. In terms of the stage of the projects, around $1.7 trillion worth of projects are under the design stage followed by $408 billion in the study phase.