MEED Insights: Kuwait Projects 2018 – Project spending in the low oil price era

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Faced with a low-oil-price environment, Kuwait is prioritising a diversified economy through the launch of an ambitious capital spending programme exceeding $100bn.

With increased private sector participation, KAPP, which has been tasked with overseeing the PPP programme, has more than $27bn-worth of projects in pipeline.

Currently, Kuwait has more than $90bn projects under execution, with a further $59.9bn-worth in the study phase, and $61bn at various stages of pre-execution and due for award in the next couple of years.

Track upcoming opportunities with MEED’s latest Kuwait Projects 2018 report. The report examines historic, current and future project opportunities in the state as well as government policy; spending plans and challenges.

Written by MEED, the Middle East market experts within the GlobalData Group, the report covers the political and macro-economic situation in the state and provides a detailed and comprehensive overview of the key project trends and opportunities across all sectors such as oil and gas, construction, power, and the PPP programme.

It is an essential tool for anyone working in or interested in working in Kuwait.



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Table of Contents

1. Preface 2

2. Executive summary 7

3. Governance 9

3.1 Parliamentary storms since 2011 11

3.2 Regional relations 16

3.2.1 The Divided Zone 16

3.3 The Paris Climate Agreement 19

3.3.1 Plans to reduce greenhouse gas emissions 20

4. Economy 21

4.1.1 Structure of the economy 22

4.1.2 Energy sector 22

4.2 Economic performance 24

4.2.1 Balance of payments 27

4.2.2 Fiscal reforms 27

4.2.3 The medium-term outlook 30

4.3 Debt & assets 31

4.4 Banking & finance 31

4.4.1 Kuwait Stock Exchange 33

4.4.2 The exchange rate 35

4.4.3 Credit ratings 36

4.5 Ease of doing business 36

4.6 Economic planning 37

4.7 Conclusion 40

5. The PPP programme 41

5.1 The legal framework 42

5.1.1 KAPP guidebook 45

5.1.2 Procedures for PPP projects 46

5.2 Request for proposals (RFP) 47

5.3 Evaluation of bids 47

5.4 Sale of shares in PPP projects 48

5.5 Implementation & monitoring 49

5.6 End of contract 50

5.7 Consolidation of authorities 50

5.8 Projects programme 51

5.8.1 Project delays 53

5.8.2 Al-Zour North IWPP Phase 1 57

5.8.3 Al-Zour North IWPP Phase 2 58

5.8.4 Al-Khiran IWPP 59

5.8.5 Umm al-Hayman wastewater project 60

5.8.6 Kabd municipal waste facility 61

5.8.7 Al-Abdaliya ISCC 62

5.8.8 Kuwait national railway 63

5.8.9 Kuwait Metro 64

6. Projects market 66

6.1 Historical analysis 66

6.1.1 Project awards in 2017 68

6.1.2 Outlook for 2018 68

6.2 Main clients 70

6.3 Main contractors 72

6.4 Future projects 73

7. Energy 78

7.1 Introduction 78

7.1.1 Oil 78

7.1.2 Gas 80

7.1.3 Refining 82

7.1.4 Petrochemicals 83

7.2 Industry structure 83

7.2.1 Supreme Petroleum Council 84

7.2.2 Oil Ministry 84

7.2.3 Kuwait Petroleum Corporation 85

7.3 Politics & the oil sector 90

7.3.1 Project Kuwait/TSAs 92

7.3.2 K-Dow 92

7.3.3 Oil strike 93

7.4 Upstream 93

7.4.1 Oil fields 93

7.4.2 Enhanced oil recovery 102

7.4.3 Gas fields 106

7.4.4 Jurassic non-associated gas expansion scheme 109

7.5 Production & export infrastructure 111

7.5.1 Production & distribution 111

7.5.2 Export facilities 119

7.5.3 Gas imports 121

7.6 Downstream 122

7.6.1 Mina al-Ahmadi 124

7.6.2 Mina Abdulla 125

7.6.3 Shuaiba 126

7.6.4 The NRP 126

7.6.5 The CFP 132

7.7 Petrochemicals 136

7.7.1 Petrochemical Industries Company 137

7.7.2 Equate Petrochemicals 138

7.7.3 The Kuwait Olefins Company (TKOC) 138

7.7.4 Kuwait Aromatics Company (Karo) 138

7.7.5 The Kuwait Styrene Company (TKSC) 139

7.7.6 Other plants 139

7.7.7 Other projects 140

7.8 Contract awards 141

8. Power 142

8.1 Consumption 142

8.2 Generation 143

8.3 Forecasts 147

8.4 Projects 148

8.4.1 Al-Zour North IWPP 149

8.4.2 PPP law amendments 150

8.4.3 Future PPP projects 151

8.4.4 MEW projects 153

8.4.5 Subiya projects 154

8.5 Fuel 156

8.6 Alternative energy 158

8.6.1 Abdaliya ISCC 159

8.6.2 Kabd Municipal Solid Waste Project 161

8.6.3 Kisr renewables programme 162

8.7 Contractors 165

8.8 Transmission & distribution 166

9. Desalination 168

9.1 Projects 169

10. Wastewater 174

10.1 Sulaibiya 175

10.2 Umm al-Hayman treatment plant 177

10.3 Sabah Al-Ahmad Sea City: sewage treatment plants 178

10.4 Sewer systems 179

10.5 TSE 181

11. Construction 183

11.1 Market overview 183

11.2 The Kuwait Masterplan 186

11.3 Township programme 188

11.3.1 South Al-Mutlaa City 192

11.3.2 South Saad al-Abdullah City 196

11.3.3 Township PPP packages 197

11.4 Healthcare 198

11.4.1 Unawarded hospital projects 201

11.5 Kuwait University 202

11.6 KAPP 206

11.6.1 Schools Development Programme 206

11.6.2 Services and Entertainment Centre in Egaila 207

11.6.3 South Al-Jahra Labour City 207

11.7 Other projects 208

11.7.1 National Bank of Kuwait: new headquarters 209

11.7.2 Palace of Justice 209

11.7.3 Juvenile Housing Care Complex 209

11.7.4 Al-Jahra Ministerial Complex 209

11.7.5 Hospitality projects 210

12. Transport 213

12.1 Aviation 213

12.1.1 Airport expansion 215

12.1.2 Kuwait Airways 221

12.2 Ports 222

12.2.1 Mubarak al-Kabeer Seaport 224

12.2.2 Expansion of existing ports 226

12.3 Rail 227

12.3.1 Mainline 229

12.3.2 Metro 230

12.4 Roads 233

12.4.1 Al-Ghouse Road 236

12.4.2 First Ring Road 237

12.4.3 Second and Third ring roads 238

12.4.4 Fourth Ring Road 239

12.4.5 Fifth Ring Road 239

12.4.6 Regional Road 240

12.4.7 Other roads 244

12.4.8 The Subiya Causeway 247

13. Appendix, Law No. 116 of 2014 (regarding PPPs) 249

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