Qatar's gas sector sees 19-fold jump in contracts awarded in Q1: Kamco Invest
Qatar - Total value of contracts awarded in Qatar's gas sector saw a 19-fold year-on-year surge to $4.3bn in the first quarter (Q1) of 2025, according to Kamco Invest, a regional economic think-tank.
There is no immediate threat of the US tariffs on the Gulf Co-operation Council (GCC) projects market, which is slated to 'remain strong' for the whole of 2025, it also said in a report.
QatarEnergy LNG recently selected India's Larsen & Toubro Energy Hydrocarbon (LTEH) for a $4bn to $5bn package covering the engineering, procurement, construction, and installation contract under the second phase of North Field Production Sustainability (NFPS) project, Kamco Invest said, quoting MEED Projects.
This includes construction and installation of two major gas compression systems — CP8S and CP4N — each weighing 25,000–35,000 tonnes. The scope of the project also involves building compression platforms, flare gas platforms, and other related structures.
The total value of overall contracts awarded in Qatar stood at $5.2bn in January-March this year, which however fell 37.9% on an annualised basis. This drop in contract awards was due to a sharp decrease in the value of projects awarded in Qatar's transport, water, and construction sectors, Kamco said.
Notably, there were no contracts awarded in the transport, water, chemical, and industrial sectors of Qatar during the review period. In addition, total contracts awarded in Qatar's construction sector fell by 64.6% year-on-year to $401mn in Q1-2025.
Highlighting that the outlook for the GCC project market for 2025 is expected to remain strong; it said numerous favourable factors across the GCC are anticipated to support project market momentum in 2025.
Among them is notable growth in the GCC hospitality projects during the year. As per MEED Projects, healthcare contracts worth over $3bn are currently out-to-bid, signalling a strong project pipeline. Saudi Arabia leads with 51% of the total value of the GCC healthcare pipeline in 2025. In comparison, the UAE has $6.8bn in contracts under planning and execution and Kuwait has $3.6bn in hospitality projects under similar stages.
Saudi Arabia's $450mn project — King Faisal Medical City in Asir: Phase 2 — ranks as the largest planned and un-awarded GCC healthcare project out-to-bid, followed by Qatar's $300mn Ashghal - Hamad General Hospital (HGH) Safety Improvements (Packages 1, 2 & 3).
Overall, the GCC holds around $1.54tn in contracts at the pre-execution stage, with Saudi Arabia accounting for the largest share (52.1%).
A number of these projects are anticipated to be awarded within the next 6–12 months, indicating that 2025 could rival or surpass the award volumes of 2024, according to MEED Projects.
About 34.3% of these contracts are in the design phase, while about 8.1% are currently under bid evaluation. Saudi Arabia leads with $801.2bn in pre-execution stage projects, followed by the UAE ($312.3bn), Oman ($169.9bn), and Kuwait ($130.8bn), respectively.
Elaborating on the US tariff and its effect, it said 'on the surface, there appears to be no immediate threat of US tariffs impacting the GCC projects market, as most GCC countries have limited trade exposure to the US on both the import and export fronts.'
According to MEED Projects, only Bahrain sends more than 5% of its exports to the US. Furthermore, the US maintains trade surpluses with five of the six GCC markets, and as a result, a basic tariff of 10% has been imposed.
In addition, hydrocarbons — the primary export commodity of GCC nations — are among the goods exempted from tariffs. However, declining oil prices, driven by negative global economic sentiment linked to US tariff effects on trade, may have an impact on GCC revenues and consequently their project funding capabilities.
Reduced oil prices lead to lower government income across the GCC, which in turn may result in reduced spending on projects.
© Gulf Times Newspaper 2022 Provided by SyndiGate Media Inc. (Syndigate.info).
Santhosh V. Perumal
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