MEED Insights: Saudi Arabia 2018 – New opportunities in the Middle East’s biggest market

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The launch of the $500bn Neom future city project in late 2017 marked the start of a new phase of development for the giant Saudi Arabian economy – presenting numerous investment and business opportunities across all sectors.

There has never been a better time to engage with Saudi Arabia. With confidence returning to the global energy markets, oil prices are rising once again and momentum is building behind the kingdom’s Vision 2030 economic transformation programme.

Written by MEED, the Middle East market experts within the GlobalData Group, the report helps you to make the most of the opportunities ahead.Saudi Arabia 2018: New opportunities in the Middle East’s biggest market examines the outlook for business in the region and explains how and where the next great opportunities are emerging.

With more than $1.4tn worth of major projects planned or underway, Saudi Arabia is by far the biggest projects market in the MENA region. It is home to almost half of all projects planned in the GCC. Success in Saudi Arabia underpins success in the region.

Helping companies navigate the kingdom’s huge and rapidly changing market, the report provides all the latest data and essential insight that will help you adapt your business to be able to compete successfully and win business in the region’s biggest and most exciting market.

Packed with all the latest data, maps, charts, client and contractor details and unrivaled blend of market-leading data and expert analysis, Saudi Arabia 2018 is a must-have and up-to-date guide for companies seeking to work in the region.

Scope

Saudi Arabia 2018: New opportunities in the Middle East’s biggest market covers all of the major sectors of the Saudi economy, including:

• The government and economy of Saudi Arabia

• The Vision 2030 transformation

• Saudi Arabia’s megaprojects: Neom future city and other key projects

• Saudi Arabia’s projects market

• Saudi Aramco and the Saudi oil & gas industry

• Petrochemicals investment in Saudi Arabia

• Saudi construction market outlook

• Mining and metals

• Manufacturing

• The transformation of Saudi Arabia’s power market

• Renewable and alternative energy in Saudi Arabia

• Water and wastewater in Saudi Arabia

• Saudi Arabian railways and metros

• Saudi Arabian ports

• Airports and aviation in Saudi Arabia

• Doing business in Saudi Arabia in 2018

Reasons to Buy

The report includes special sections that focus on the implications of Vision 2030 and the NTP that will help you understand the road ahead for the kingdom.

• Be informed: Understand the changes taking place in the kingdom and what they mean to you

• Identify project opportunities being created as a result of the government drive

• Access key data on current and future size of each sector

• Understand changes in the key government agencies and what these means for business

• Identify and plan for new risks and emerging challenges in the kingdom

• Understand the priorities for key clients such as Saudi Aramco, Saudi Electricity Company, Makkah& Medina Development Corporation and the Saudi Railways Organisation

Table of Contents

1 Executive summary 9

2 National transformation 12

2.1 Vision 2030: Progress Report 14

2.1.1 Social reforms 14

2.1.2 Transformational megaprojects 15

2.1.3 The rise of PIF 16

2.1.4 Aramco IPO 16

2.1.5 Privatisation and PPP 16

2.1.6 Corruption crackdown 17

2.1.7 NTP

2.0 18

2.2 Vision 2030 targets 18

2.2.1 Economy 19

2.2.2 Project spending 19

2.2.3 Public Investment Fund (PIF) 19

2.2.4 Oil & gas 19

2.2.5 Tourism & culture 20

2.2.6 Homeownership & housing 20

2.2.7 Healthcare 20

2.2.8 Education 20

2.2.9 Small and medium-sized enterprises (SMEs) 21

2.2.10 Job market 21

2.2.11 Private sector 21

2.2.12 Defence 21

2.2.13 Mining 21

2.2.14 Renewables & waste management 21

2.2.15 Transport & logistics 22

2.2.16 GCC 22

2.2.17 Food & agriculture 22

2.2.18 Digital economy 22

2.3 National Transformation Programme (NTP) 23

2.3.1 Moving away from oil 24

2.3.2 National Project Management Office 25

2.3.3 NTP targets 26

3 Government 31

3.1 Change in the ruling family 31

3.2 Relations with the US 33

3.3 Regional diplomacy and conflict 36

3.4 Saudi Arabia and world oil 36

3.5 Economic and social development 38

3.6 Social reforms 39

4 Economy 41

4.1 GDP 42

4.2 Inflation 43

4.3 Oil production 44

4.4 Government finances 45

4.4.1 Government debt 47

4.5 Balance of payments 48

4.6 Banking and monetary policy 49

4.7 The stock market 51

4.8 Labour market 51

4.9 The economy in 2017-20 53

4.9.1 The oil market 53

4.9.2 Budget 2018 55

4.9.3 Medium-term financial strategy 57

4.10 MEED forecast to 2020 60

4.10.1 GDP 61

4.10.2 The budget 62

4.10.3 Government debt 63

4.10.4 Exports, imports and the current account 64

4.11 Saudi Aramco IPO 65

4.12 The IMF view 67

4.13 Credit rating agencies 68

5 Projects market 69

5.1 Spending drivers 71

5.2 Outlook 72

5.3 Leading contractors 73

5.4 Leading clients 75

5.5 Megaprojects 76

6 Oil, Gas and Petrochemicals 78

6.1 Overview 78

6.2 Vision 2030 80

6.3 Energy sector structure 81

6.4 Saudi Aramco 81

6.4.1 Aramco IPO 84

6.4.2 Tax rate cuts 85

6.5 Upstream oil 86

6.5.1 Resource depletion 87

6.5.2 Onshore capital projects 91

6.5.3 Exploration 92

6.5.4 Export infrastructure 93

6.5.5 Oil production 93

6.6 Natural gas 95

6.6.1 Master gas system expansion 97

6.6.2 Wasit gas development 98

6.6.3 Haradh and Hawiyah gas processing 98

6.6.4 Unconventional gas 100

6.6.5 Shaybah NGL 101

6.6.6 Empty Quarter 101

6.6.7 Midyan project 101

6.6.8 Gas demand 102

6.6.9 Fuel reforms 102

6.7 Refining 103

6.7.1 Refinery projects 106

6.8 Petrochemicals 109

6.8.1 Feedstock issues 110

6.8.2 Refining petrochemicals integration initiative 112

6.8.3 Key companies 113

6.9 Projects market 119

6.9.1 Leading contractors 121

7 Mining and natural resources 123

7.1 Investment 127

7.2 Gold and base metals 127

7.3 Phosphate 130

7.4 Aluminium and bauxite 131

7.5 Industrial minerals 132

7.6 Exploration 132

7.7 Vision 2030 targets 134

8 Industry 135

8.1 Diversification 136

8.1.1 Incentives 137

8.1.2 Industrial cities 137

8.1.3 Challenges 140

8.1.4 Employment 140

8.2 Automotive 141

8.3 Polysilicon 142

8.4 Cement 142

8.5 Steel 145

8.6 Aluminium 147

8.7 Fertilisers 147

8.8 Outlook 149

8.9 Vision 2030 targets 151

8.10 Defence 151

9 Power 153

9.1 Overview 154

9.2 Supply & demand 156

9.3 Power generation projects 161

9.4 Upcoming projects 163

9.5 Conversion projects 164

9.6 Steam plants 165

9.7 Decommissioning 165

9.8 Private power market 166

9.9 Developers 170

9.10 SEC privatisation 171

9.11 SWCC privatisation 172

9.12 Fuel & alternative energy 173

9.13 Renewable energy 175

9.13.1 NREP projects 176

9.13.2 Other projects 178

9.14 Nuclear 181

9.15 Energy efficiency 182

9.16 Transmission & distribution 183

10 Desalination 188

10.1 Supply/demand 189

10.2 Saline Water Conversion Corporation 191

10.3 Private developers 193

10.4 Future private projects 194

10.5 Decommissioning 196

10.6 Future projects 197

10.7 Privatisation 199

11 Wastewater 201

11.1 Management contracts 202

11.1.1 Future private sector partnerships 206

11.2 Future spending 207

11.3 Groundwater 211

11.4 Treated sewage effluent 211

11.5 Marafiq 215

12 Construction 217

12.1 Contractors and the government 225

12.2 PPP projects 227

12.3 Real estate 229

12.4 Healthcare 237

12.5 Education 240

12.6 Roads 242

13 Rail 244

13.1 Railway masterplan 245

13.2 Structure of the rail industry 246

13.3 Mainline 248

13.3.1 North-South Railway 248

13.3.2 Haramain high-speed railway 251

13.3.3 Saudi Landbridge 253

13.3.4 Other lines 254

13.3.5 Mainline railways – PPP 255

13.4 Metro/ light rail transit 256

13.4.1 Urban rail – PPP 256

13.4.2 Riyadh Metro 256

13.4.3 Mecca Metro 260

13.4.4 Medina Metro 263

13.4.5 Jeddah Metro 264

13.4.6 Dammam Metro 268

13.5 Monorail 268

14 Aviation 270

14.1 Airport projects 273

14.1.1 Planned and unawarded projects 277

14.2 Market liberalisation 279

15 Ports 282

15.1 Sector drivers 284

15.2 Major ports 284

15.3 Projects and investments 286

15.4 The missing port-rail link 288

15.5 Privatisation 289

15.6 Vision 2030 targets 289

16 Doing Business 290

16.1 Trading with Saudi Arabia 291

16.2 Doing business with the public sector 293

16.3 Taxation 294

16.4 Employment law 295

16.5 Intellectual property 295

16.6 Enforcing contracts, resolving disputes and liquidating a business 295

17 Appendix 297

Frequently asked questions

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