Qatar's projects market zoomed 69% year-on-year in Q1, 2023

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"The growth in contract awards was mainly due to the country’s maintenance of strong economic performance," Kamco Invest said

Qatar’s strong macro fundamentals helped it report a robust 69.2% year-on-year increase in total value of contracts awarded to $3.6bn in the first quarter (Q1) of 2023, after hosting the FIFA World Cup in 2022, according to Kamco Invest, a regional economic thinktank.

"The growth in contract awards was mainly due to the country’s maintenance of strong economic performance," Kamco Invest said in its latest report.

Quoting MEED, it said Qatar’s GDP (gross domestic product) growth is expected to dip from 3.4% in 2022 to 2.4% in 2023 but this will have little impact on Qatar’s fiscal health to continue to fund and award projects.

One of the notable investment decisions that Qatar made during Q1-2023 was the $6bn Ras Laffan petrochemicals project with Chevron Philips Chemical. The Ras Laffan petrochemicals complex, which is set to start production in 2026, comprises an ethane cracker with capacity of 2.1mn tonnes per year of ethylene, thus increasing Qatar’s ethylene production potential by nearly 70%.

The complex also has two polyethylene trains which have combined output of 1.7m tonnes per year of high-density polyethylene polymer products which also raises Qatar’s overall petrochemical production by 82% to 14mn tonnes per year.

In terms of investment, QatarEnergy and China Petrochemical (Sinopec) have recently signed a deal in which China Petrochemical will invest in Qatar’s $28.75bn North Field East expansion project.

The agreement requires the transfer of a 5% stake in one of the four trains of the LNG (liquefied natural gas) project to Sinopec.

Qatar’s North Field East expansion project is anticipated to raise the country’s annual LNG export volume from 77mn tonnes per year to 126mn tonnes per year.

In terms of contract awards by sector, the chemical sector took over from the Gas Sector as the largest sector by value of awarded projects in the Qatar recording $2.8bn worth of contract awards during Q1-2023.

The Qatari chemical sector accounted for 76.9% of the total value of projects awarded in the country during the quarter. Comparatively, the construction sector recorded $116mn worth of project awards during the quarter, recording a 63.1% year-on-year decline.

Despite the decline in value of contracts awarded, Qatar’s construction sector is expected to show a compound annual growth rate of 9.5% from 2023 to 2030 to $123.1bn mainly due to planned government spending on infrastructure and other building projects.

The Qatari government has allocated an estimated $14.8bn for new projects between 2021 and 2023.

Moreover, the total value of projects awarded in the power sector reached $328mn during the quarter while aggregate value of contracts awarded in the transport sector touched $278mn.

About the projects in the wider Gulf Cooperation Council (GCC), Kamco Invest said the GCC project awards expanded during Q1-2023 despite global economic challenges such as the global financial sector turmoil, elevated inflation, and the ongoing Ukraine-Russia conflict.

Total value of the GCC contracts awarded rose 54.7% year-on-year during Q1-2023 to $29.9bn.

"This was the second highest quarterly project awards since the start of 2022. All GCC project markets witnessed year-on-year project awards growth during Q1-2023 except for Bahrain which remains the smallest project market in the region," the report said.

The growth in the GCC project awards during this quarter has been partly fueled by the determination of the regional countries to diversify their economies away from hydrocarbons, it said.

The GCC countries have backed and invested in projects in the industrial sector such as aluminum, steel, and other industrial equipment manufacturing projects, according to Kamco Invest.

Saudi Arabia remained the largest projects market in the GCC during Q1-2023. Its project awards recorded 17.9% growth during the quarter to $13.3bn.

Comparatively, the UAE project awards more than doubled to $10bn during the quarter while Kuwait’s contract awards amounted to $1.8bn during Q1-2023 compared to $407mn in Q1-2022, recording the highest percentage year-on-year contract awards increase in the region during the quarter.
© Gulf Times Newspaper 2022 Provided by SyndiGate Media Inc. (
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