The outlook for major projects in Kuwait in 2018 H MEED projects market analysis series

Transcription

1 The outlook for major projects in Kuwait in 2018 H MEED projects market analysis series

2 Preface Kuwait is one of the Middle East s most promising markets, presenting a wide range of opportunities in the projects sector and in other areas for local, regional and international businesses. It is a high-income, asset-rich economy with oil reserves that can last about 100 years at present production rates and substantial gas assets. The government has practically no debt and official savings are worth at least $592bn. The private sector has abundant savings and the banking system is profitable, well-capitalised, liquid and solvent. With about $263bn worth of projects planned or underway, Kuwait is the third largest projects market in the GCC and sixth largest in the Middle East and North Africa. And, driven by an ambitious public-private partnership (PPP) programme, Kuwait s projects market has expanded more than 6 per cent over the past 12 months. Despite Kuwait s huge promise, companies seeking new business opportunities should always be prepared for unexpected challenges. Kuwait has in the past, disappointed companies seeking to tap its potential. Political infighting allied to a cumbersome bureaucracy has resulted in many planned projects being delayed or cancelled. And the fall in oil prices since 2014 has added new uncertainties to Kuwait s projects market. The relaunch of the Kuwait Vision 2035 in January 2017, marked a major new drive to remove many of the previous barriers to investment, and introduces an ambitious programme of reforms aimed at mitigating the impact of lower oil prices. After a difficult year in 2017, Kuwait s economy is rebounding in 2018, supported by a surge in project awards and the creation of new job opportunities for nationals. Kuwait Projects Market H2, 2018 is the latest market report from MEED and provides you with a comprehensive update of Kuwait s projects market, offering early actionable market intelligence combined with MEED s unique expert insight on Kuwait s new and future project opportunities. The reports also provides an assessment of the political and economic background to Kuwait s projects market that enables a detailed understanding of the barriers and challenges that may arise, and also of the efforts being taken to remove them. Richard Thompson Editorial Director, MEED June 2018

3 Contents Section Slide No. 1 Executive summary 7 2 Country overview Projects market Oil & Gas Construction Transport Power & water All rights reserved. No part of this publication may be reproduced, stored in any retrieval system, or transmitted in any form, by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior permission of the copyright owner. While every care has been taken in completing this report, no responsibility can be accepted for any errors or omissions that may occur. Copyright 2018 MEED Media FZ LLC

4 List of charts Fig. 1: Kuwait country map Fig. 2: GDP by sector, 2016 (%) Fig. 3: Nominal GDP ($bn) versus annual real GDP growth (%) Fig. 4: Kuwait current account balance, Fig. 5: Kuwait budget, (KD bn) Fig. 6: Gross Official Reserves, ($bn) Fig. 7: Kuwait Gross Government Debt, Fig. 8: Value of all projects planned or underway ($m) Fig. 9: Projects market, by project status ($m) Fig. 10: Projects market, by sector (%) Fig. 11: Value of contract awards by year ($m) Fig. 12: Value of contract awards by year and sector ($m) Fig. 13: Biggest clients in Kuwait by contracts under execution ($m) Fig. 14: Biggest contractors in Kuwait by contracts under execution ($m) Fig. 15: Projects planned but unawarded, by status ($m) Fig. 16: Projects planned but unawarded, by sector ($m) Fig. 17: Oil & Gas Projects market, by project status ($m) Fig. 18: Oil & Gas Projects market, by sub sector (%) Fig. 19: Value of contract awards by year ($m) Fig. 20: Value of contract awards by year and subsector ($m) Fig. 21: Biggest clients in Kuwait in oil and gas sector by Fig. 22: Biggest contractors in Kuwait in oil and gas sector by Fig. 23: Projects planned but unawarded, by status ($m) Fig. 24: Projects planned but unawarded, by subsector ($m) Fig. 25: Construction Projects market, by project status ($m) Fig. 26: Construction Projects market, by sub sector (%) Fig. 27: Value of contract awards by year ($m) Fig. 28: Value of contract awards by year and subsector ($m) Fig. 29: Biggest clients in Kuwait in construction sector by Fig. 30: Biggest contractors in Kuwait in construction sector by Fig. 31: Projects planned but unawarded, by status ($m) Fig. 32: Projects planned but unawarded, by subsector ($m)

5 List of charts Fig. 33: Transport Projects market, by project status ($m) Fig. 34: Transport Projects market, by sub sector (%) Fig. 35: Value of contract awards by year ($m) Fig. 36: Value of contract awards by year and subsector ($m) Fig. 37: Biggest clients in Kuwait in transport sector by contracts under execution ($m) Fig. 38: Biggest contractors in Kuwait in transport sector by Fig. 39: Projects planned but unawarded, by status ($m) Fig. 40: Projects planned but unawarded, by subsector ($m) Fig. 41: Power & Water Projects market, by project status ($m) Fig. 42: Power & Water Projects market, by sub sector (%) Fig. 43: Value of contract awards by year ($m) Fig. 44: Value of contract awards by year and subsector ($m) Fig. 45: Biggest clients in Kuwait in power & water sector by Fig. 46: Biggest contractors in Kuwait in power & water sector by Fig. 47: Projects planned but unawarded, by status ($m) Fig. 48: Projects planned but unawarded, by subsector ($m) List of tables Table 1: Kuwait economic indicators, 2018 Table 2: Biggest megaprojects under construction in Kuwait Table 3: Major projects to be tendered in 2018 and 2019 Table 4: Biggest oil and gas megaprojects under construction in Kuwait Table 5: Major oil and gas projects to be tendered in 2018 and 2019 Table 6: Biggest construction megaprojects under construction in Kuwait Table 7: Major construction projects to be tendered in 2018 and 2019 Table 8: Biggest transport megaprojects under construction in Kuwait Table 9: Major transport projects to be tendered in 2018 and 2019 Table 10: Biggest power & water megaprojects under construction in Kuwait Table 11: Major power & water projects to be tendered in 2018 and 2019

6 Projects market, by project status Kuwait has a strong pipeline of future projects. Of Kuwait s $280bn of projects planned or underway, about $116bn, 41 per cent were under execution in May Of the $280bn pipeline of planned projects, about $96bn, 34 per cent, are at the early study stage. About $27bn worth of projects, about 9 per cent are at pre-execution design stage. 120, ,000 80,000 60,000 40,000 20,000 0 More than 50 per cent of the project pipeline (pre-execution stage), equal to $96.0 billion, is at the study stage Major projects in study stage include the Kuwait City Metropolitan Rapid Transit (MRT) and Al Khiran City with net project values of $18 billion and $14 billion respectively As of May 2018, about $17.4 billion worth of projects were at the tendering stage with about $550m of bids submitted for energy projects Some $27.1 billion worth of projects are at the design stage Fig. 9: Projects market, by project status ($m) Source: MEED Projects, May 2018

7 Oil & Gas projects market, by sub sector Downstream projects dominate with a 46.9 per cent share by value. The New Refinery Project, Clean Fuels Project 2020 and Ratqa Lower Fars Heavy Oil Handling Facilities are the three biggest projects in the oil and gas industry in Kuwait, with a net project value of $4.5 billion, $4.1 billion, and $4.05 billion respectively. Downstream sector accounts for the biggest share of oil and gas projects in Kuwait with $33.5 billion Upstream 37% Downstream 47% Upstream and downstream together account for more than 80 per cent of the oil and gas projects market in Kuwait with a combined value of $60 billion Transmission 8% Storage 8% In May 2018, the state-owned upstream operator Kuwait Oil Company (KOC) has prequalified 12 companies for its New Strategic Gas Export Pipeline project which is expected to be worth $200m, and extend from North Kuwait to the Mina Al-Ahmadi Refinery Fig. 18: Oil & gas projects market, by sub sector (%) Source: May 2018 MEED Projects

8 Biggest contractors by contracts under execution Mohammed Abdulmohsin Al Kharafi & Sons is the biggest contractor in Kuwait with contracts worth about $1.8 bn under execution. Sayed Hamid Behbehani & Sons is second with projects of a net value of $1.7 billion Fig. 30: Biggest contractors in Kuwait in construction sector by contracts under execution ($m) Mohammed Abdulmohsin Al Kharafi & Sons Sayed Hamid Behbehani & Sons Ahmadiah Contracting & Trading Co Pizzarotti Khalid Ali Al Kharafi & Brothers Co Metallurgical Corporation of China The top five contractors have projects with a combined net value of $6.3 billion The top ten contractors in Kuwait have projects with a net value of $9.3 billion. This equates to 30 per cent of the overall value of the projects under execution Shapoorji Paloonji / Al-Sager General Trading & Contracting Alghanim International General Trading & Contracting Shapoorji Pallonji & Co Combined Group Contracting ,000 1,500 2,000 Source: May 2018 MEED Projects

9 Power & Water contract awards by year, ($m) The value of project contract awards hit a record high of about $5bn in 2017, driven by the award of Umm al-hayman Wastewater Treatment Plant Expansion, Subiya Combined Cycle Gas Turbine : Phase 3, and Subiya Conversion to Combined Cycle : Phase 2. 5,000 4,000 3,000 2,000 1, * (Until May) Total project contract awards between 2008 to May 2018 were $24 billion The contract awards in the first half of 2018, from January to May, was valued at $327 million. The invitation of bids for high voltage electricity lines and the approval of wastewater and solid waste PPP projects from Council Ministers in Kuwait in the first half of 2018 are going to drive the market in near future Fig. 43: Value of contract awards by year ($m) Source: May 2018 MEED Projects Order full report here >>>