Kuwait Times, Sunday, Jan 23, 2022 | Jamada Al-Aakhirah 20, 1443
Kuwait project activity gathered pace in fourth quarter of 2021
Kuwait:
The total value of project awards in Kuwait surged to KD 556 million (+265
percent q/q; +279 percent y/y), according to MEED Projects. This brings the
total value of awards in 2021 to KD 1.5 billion, up 13 percent on 2020. The
figure falls short of the KD 2.4 billion that was forecast earlier, a likely
outcome of government tendering delays amid cutbacks in capital spending and
pandemic-linked supply chain constraints.
The surge in project awards in 4Q21 stemmed from the oil and gas sectors, while,
for the year as a whole, the construction sector accounted for almost 50 percent
of all awards, followed by the oil and gas sector with 32 percent. MEED Projects
anticipates activity accelerating in 2022, with about KD 3.0 billion worth of
projects set to be awarded.
Project awards in the construction sector amounted to KD 128 million in 4Q21.
The bulk of awards came from the Hessah Al-Mubarak-Low Rise Commercial Buildings
project (KD 42 million) and the KOC-KERP: Soil Remediation project (KD 36
million). Meanwhile, total 2021 construction sector awards reached KD 705
million, up 89 percent from 2020. In 2022, a similar value of construction
contracts are expected to be awarded (KD 723 million). These include the
CMGS-Development of Four Sites at Sheikh Jaber Al-Ahmad Al-Sabah Causeway (KD
165 million) and KOC’s Kuwait Excavation, Transportation, and Remediation
Project (KD 150 million), both currently scheduled for 2Q22.
Project activity in the power and water sectors slowed down again in 4Q21, with
awards falling 5 percent q/q to KD 45 million. Several small-scale projects were
awarded last quarter, including two of PAHW’s Feeding Main Transformer Stations
cables projects valued at KD 30 million. Activity in the power and water sectors
should, however, pick up in 2022, with about KD 798 million in the project
pipeline. Several large-scale water projects are expected in the first half of
2022, including MPW’s Wastewater Treatment Plant (KD 173 million) and phase 2 of
MEW’s Doha Desalination Plant (KD 130 million).
The transport sector saw no projects awarded in 4Q21. This is the third
consecutive quarter of minimal activity, following 2Q21’s outturn of only KD 5
million. Looking ahead, a recovery could be around the corner if the KD 1.1
billion worth of transportation projects, including PAHW’s South Sabah Al-Ahmed
Township (KD 300 million) and MPW’s Regional South Road (KD 130 million)
projects are awarded in 1H22.
Oil and gas sector activity recovered in 4Q21, after several quarters in which
it was relatively subdued. Oil and gas awards came in at KD 383 million in 4Q21,
accounting for nearly 70 percent of all awards in the quarter. This was mainly
KOC’s JPF4 & 5 Off-Plot Works & Production Facilities (KD 246 million) and 11
Patterns Well Hook-Up (KD 123 million) projects. In 2022, KD 315 million worth
of awards could materialize, including several KOC-related oil projects (KD 150
million).
Project activity in Kuwait’s chemical sector, which has been relatively quiet
since 2011, is not expected until 2023, when the contract for KIPIC’s Al-Zour
Petrochemical Complex (KD 2.85 billion) is expected to be awarded.