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July 24, 2019

UAE’s Masdar, EDF secure financing for Saudi wind farm project

A consortium of EDF Renewables and Abu Dhabi Future Energy Company (Masdar) has completed the financing of the Dumat Al Jandal utility-scale wind project in Saudi Arabia, with the backing of Saudi and international banks.

With an installed capacity of 400 megawatts (MW), the Dumat Al Jandal project will be Saudi Arabia’s first wind farm and the largest in the Middle East.

Led by EDF Renewables and Masdar, a subsidiary of Mubadala Investment Company, project construction will begin shortly and commercial operations are due to start in the first quarter of 2022, a statement said.

Vestas is the contracted wind-turbine technology provider and responsible for the engineering, procurement and construction (EPC) contract while TSK will be responsible for the balance of plant, and CG Holdings will provide the substations and high-voltage solutions, it added.

“We are delighted to take part in the first wind project in the country, which is set to be the most powerful wind farm in the Middle East. This new step reflects the quality of our partnership with Masdar, which has enabled us to jointly submit the most competitive bid. Wind power is now representing a renewable and economical solution in the energy mix,” said Bruno Bensasson, EDF Group senior executive president responsible for Renewable Energies, and chairman and CEO of EDF Renewables.

“This new project demonstrates our ambitions in the country and represents another step forward under the EDF Group’s Cap 2030 strategy, which aims to double its renewable energy capacity by 2030 – both in France and worldwide – to 50GW.”

“The award of Saudi Arabia’s first and the Middle East’s largest wind farm during Abu Dhabi Sustainability Week in January was a momentous occasion for our company and our partners,” added Mohamed Jameel Al Ramahi, CEO of Masdar.

“It also illustrated the depth of Saudi Arabia’s commitment to realise its bold strategy to substantially increase the contribution of renewables in its total energy mix to 27.3GW by 2024, from wind as well as solar energy. The over-subscribed financing of the Dumat Al Jandal project further illustrates the confidence of local and international lenders, and the investment community, in the economy of the Kingdom and its potential as a hub for highly cost-effective renewable energy development.”

The Dumat Al Jandal wind farm will supply electricity according to a 20-year power purchase agreement with the Saudi Power Procurement Company, a subsidiary of Saudi Electricity Company.

The wind farm will be located 560 miles north of Riyadh, in the Al Jouf region of Saudi Arabia.

The Renewable Energy Project Development Office (REPDO) of the Saudi Ministry of Energy, Industry and Mineral Resources (MEIM) awarded the $500 million Dumat Al Jandal wind farm in January following a call for tenders in August 2017.

The winning consortium submitted the most cost-competitive bid of $21.3 per megawatt hour (MWh).

Source:https://www.arabianbusiness.com/energy/424335-uaes-masdar-edf-secure-financing-for-saudi-wind-farm-project

July 24, 2019

Saudi Aramco said to hold first investor earnings call in August

Saudi Aramco has invited analysts and investors to join its first investor earnings call next month as it prepares an initial public offering, according to an Aramco email seen by Reuters.

In the July 21 email, Aramco investor relations said that “Saudi Aramco will be holding its first investor earnings call in August to coincide with the publication of our H1 2019 financial results.”

Saudi Arabian energy minister Khalid Al-Falih has previously said that the kingdom wants the listing to go ahead in 2020 or 2021.

According to a recent report from Bloomberg, a number of banks originally associated with Aramco’s plans – including Evercore Inc, HSBC Holdings, JP Morgan Chase & Co and Morgan Stanley – are having internal discussions about whether to re-pitch for a role as the kingdom restarts preparations for the listing.

Citing people familiar with the discussions, the banks are aware that there could be business and political consequences if they don’t put themselves forward for a role, and that most are likely to decide to do so.

Earlier this month, Saudi Aramco reportedly held talks with a group of investment banks to discuss potential roles.

Source:https://www.arabianbusiness.com/banking-finance/424381-saudi-aramco-said-to-hold-first-investor-earnings-call-in-august

July 17, 2019

$494bn construction projects active in Kuwait

Construction projects worth more than $494 billion are currently active in Kuwait, according to new research by ProTenders.

Of these, projects worth $15.5 billion (3.1 percent) are on hold, the consultancy said in a statement.

Projects in the design stage are valued at $243.5 billion (49.3 percent) while another $63 billion (12.8 percent) are in the planning stage while $140.9 billion worth of projects are in the construction phase, making up 28.5 percent of the total.

Of the project under construction, most (44 percent) are in the oil and gas sector while infrastruction projects make up 21.9 percent and the urban buildings sector make up 34.1 percent, ProTenders data showed.

Total upcoming projects in Kuwait are worth $337.7 billion, with the large majority in the urban buildings sector (72.7 percent). Oil and gas makes up 12 percent and infrastructure 15.4 percent.

ProTenders said the top five developers in the Gulf country are currently the Secretariat of the Supreme Council for Planning and Development with $125 billion worth of projects, followed by the Kuwait Authority for Partnership Projects ($50.5 billion), Kuwait National Petroleum Company ($45.8 billion), the Ministry of Public Works ($30.2 billion) and Kuwait Oil Company ($23.7 billion).

Source:https://www.arabianbusiness.com/construction/421873-revealed-494bn-construction-projects-active-in-kuwait

July 17, 2019

Saudi Arabia, Kuwait make breakthrough in neutral zone oil talks

Neutral zone hasn’t produced anything since fields there were shut down after spats between the two countries in 2014 and 2015

Saudi Arabia and Kuwait are the closest in years to restoring oil output from the neutral zone shared by the neighboring nations after making a breakthrough in recent talks, according to people familiar with the matter.

While Kuwait and Riyadh haven’t yet reached a final agreement, in a recent meeting the Middle East nations made significant progress in resolving sovereignty issues that have thwarted negotiations in the past, the same people said, asking not to be named discussing diplomatic talks.

The neutral zone hasn’t produced anything since fields there were shut down after spats between the two countries in 2014 and 2015. The barren strip of desert straddling Saudi Arabia and Kuwait – a relic of the time when European powers drew implausible ruler-straight borders across the Middle East – can pump about 500,000 barrels a day, as much as OPEC-member Ecuador.

After a meeting in June in Riyadh, both sides are drafting new documents ahead of further talks, the people said. The next meeting may be held in Kuwait this month, one of the people said. If both sides finalize some technical details, production will be able to resume from the fields of Khafji and Wafra, one of the people said.

Still, it’s not clear whether the neutral zone will pump much oil immediately even if both nations reach a final deal because the Organization of Petroleum Exporting Countries extended its production cuts into early 2020. Saudi Arabia and Kuwait split the crude pumped from the neutral zone within their respective OPEC production quotas.

The two Gulf nations have held a number of private meetings since 2015, at one point even coming close to signing an agreement before pulling back at the last minute over wording in the final documents regarding contentious sovereignty issues. This time around, however, the talks appear to have entered a fresh phase, with both sides keen to find a final resolution, the people said, without providing details.

A spokesman for Saudi Arabia’s Energy Ministry declined to comment. Kuwait’s state oil company didn’t immediately respond to a request for comment.

Given the complexity of reaching an agreement, talks could still break down. Still, in a sign that officials are hoping the progress will continue, Kuwaiti lawmaker Adnan Abdul Samad said in mid-June after a parliamentary panel meeting with Oil Minister Khaled Al-Fadhel that officials were discussing the possibility of resuming output in the joint owned fields.

The neutral zone, spread over 5,700 square kilometres – an area a bit smaller than Delaware – was created by a 1922 treaty between Kuwait and the fledgling Kingdom of Saudi Arabia. In the 1970s the two nations agreed to divide the area and incorporate each half into their territory, while still sharing and jointly managing the petroleum riches. The region contains two main oil fields: the onshore Wafra and the offshore Khafji.

The importance of the fields is now higher due to the impact of sanctions on Venezuela and Iran, which has tightened the supply of so-called sour-heavy crude – precisely the kind of oil that the neutral zone produces. US diplomats had been pressing both side to reach an agreement, so far without success.

The disagreement between Saudi Arabia and Kuwait started on the Wafra field, which is operated by Chevron Corp, the second-largest energy company in the US In 2009, Saudi Arabia extended the original 60-year-old concession of the field, giving the American company rights over Wafra until 2039.

Kuwait was furious over the announcement and claims Riyadh never consulted it about the extension.

Source:https://www.arabianbusiness.com/energy/423392-saudi-arabia-kuwait-make-breakthrough-in-neutral-zone-oil-talks

July 17, 2019

Kuwait parliament passes budget with $22bn shortfall

Kuwait’s parliament on Wednesday passed an annual budget projecting a deficit of $22 billion, as lawmakers opposed government plans to impose taxes or reduce subsidies.

The expected shortfall in the 2019/20 budget is equivalent to 15.7 percent of Gross Domestic Product and amounts to a fifth year in a row that the oil-rich Gulf state has run a deficit.

Kuwait’s annual budgeting was hit hard by a 2014 crash in oil prices.

Public revenues are estimated at $51.8 billion (45.8 billion euros) while spending is projected at $73.8 billion, both slightly higher than last year’s projections.

Revenues from oil are estimated at $45.4 billion and comprise some 88 percent of expected total public revenues.

Lawmaker Adnan Abdulsamad, who heads parliament’s budget committee, said projections for oil income were predicated on a price of $55 a barrel.

Lawmakers have persistently opposed any plans by the government to impose taxes or raise the cost of public services.

Abdulsamad however said that even if the government imposed taxes and raised charges for services, it would not be able to plug the budget deficit.

Kuwait’s fiscal year runs from April 1 to March 31.

Lawmakers urged the government to stop squandering public funds and undertake reforms.

Over three-quarters of spending is allocated to wages and subsidies.

Economic performance in Kuwait has been lacklustre in recent years, due to the downturn in oil prices.

The economy shrank by 3.5 percent in 2017, before growing by just 1.7 percent last year.

It is projected to grow by 2.5 percent this year.

The emirate, with a native population of just 1.4 million, has a sovereign wealth fund worth more than $600 billion, providing a cushion for state finances.

Around 3.3 million foreigners live and work in Kuwait.

Source:https://www.arabianbusiness.com/politics-economics/423316-kuwait-parliament-passes-budget-with-22bn-shortfall

July 17, 2019

Kuwaiti stocks end longest rising run in three years

Equity gauges in Saudi Arabia, Dubai and Abu Dhabi advanced, while those in Bahrain and Oman fell

Traders taking profit from Kuwait’s longest-winning streak since at least 2016 sent the nation’s main stock index falling by the most in the Middle East.

The gauge declined 0.4%, led by Kuwait Finance House and Mobile Telecommunications Co. While a favourable deposit shift for lenders in the country may boost second quarter margins from lows in the previous quarter, they will stay below 2018 and might slow profits, said Edmond Christou, a financial analyst with Bloomberg Intelligence.

Still, “the implementation of the Kuwait government’s multiyear development plan, which has been essential for the acceleration of infrastructure projects and supporting the delivery of Vision 2035, will drive private-sector credit growth,” Christou wrote in a report. “The National Bank of Kuwait has gained the most from infrastructure financing thanks to its scale and capabilities.”

Equity gauges in Saudi Arabia, Dubai and Abu Dhabi advanced, while those in Bahrain and Oman fell as investors track second quarter results throughout the region.

Source:https://www.arabianbusiness.com/stocks/423806-kuwaiti-stocks-end-longest-rising-run-in-three-years

July 10, 2019

Iran, Turkey Restart Direct Train Services

Iran and Turkey have finalized an agreement to restart direct train services between Tehran and Ankara and also to run tourist trains, an official announced.

Iran’s Deputy Minister of Road and Urban Development Saeed Rasooli said at a press conference on Sunday that Iranian and Turkish delegations have finalized plans, following reciprocal visits, to launch train services between the two capitals.

As of late June, once-weekly trains between Tehran and Ankara will get rolling, he added.

At the same time, train services will be operated between Tehran and Turkey’s eastern city of Van once a week, the deputy minister said.

In addition to the Tehran-Ankara and Tehran-Van trains, tourist trains will also be operated between the two countries, Rasooli added.

He went on to say that Iran and Turkey have finalized an agreement on the tariffs on cargo trains travelling between the two countries.

Iran and Turkey have set a $30-billion annual trade target, signing several agreements to enhance cooperation in various areas.

Turkey is one of Iran’s major trading partners in the region which has come under pressure from Washington to stop working with Tehran under a fresh wave of US anti-Iran sanctions.

Source:http://www.iran-bn.com/2019/06/16/iran-turkey-restart-direct-train-services/

July 10, 2019

Iran to Set Up New Petrochemical Hub in Coastal Region

The National Petrochemical Company of Iran finalized a plan on Monday to construct the country’s third petrochemical hub across a coastal region in the southern province of Hormozgan.

In a meeting in Tehran on Monday, the CEO of the National Petrochemical Company of Iran, CEO of Iranian Mines and Mining Industries Development and Renovation (IMIDRO), and governor of Hormozgan signed a cooperation agreement on the construction of Iran’s third petrochemical hub in a region known as Parsian Energy Intensive Industries Special Economic Zone (PEISEZ).

Located in the westernmost part of Hormozgan and only 30 kilometers east of Assaluyeh which hosts giant energy projects and gas fields, PEISEZ is spread out over an area of around 10,000 hectares.

The officials signing the agreement on development of the new petrochemical hub referred to it as a project complementing Assaluyeh or even a new Assaluyeh.

IMIDRO director told reporters that the agreement to set up the new hub has been finalized after 15 rounds of talks, noting that construction of the infrastructures in the plant had begun in 2015.

He noted that 2,000 hectares of the whole area of the zone has been allocated to the petrochemical industries, predicting that the new hub will be producing 15 to 18 million tons of petrochemicals each year.

The finalized plan to develop petrochemical industries in PEISEZ came a few days after the US Treasury Department imposed new sanctions on Iran’s petrochemical group PGPIC (Persian Gulf Chemical Industry Company).

The PGPIC group holds 40 percent of Iran’s total petrochemical production capacity and is responsible for 50 percent of the country’s petrochemical exports, the US said.

The US has ratcheted up pressure on Iran since last year after withdrawing from the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA).

Source:http://www.iran-bn.com/2019/06/18/iran-to-set-up-new-petrochemical-hub-in-coastal-region/

July 10, 2019July 10, 2019

Iran, Iraq Coordinate Plans to Dredge Border River

Official delegations from Iran and Iraq held the second meeting of a joint commission for coordination on Arvand Rud, a border river flowing in Iran’s southwestern province of Khuzestan.

The Tuesday meeting was held in Tehran within the framework of an agreement signed by the heads of the two states.

The meeting was co-chaired by the Iranian Foreign Ministry’s director general for legal and international affairs and the Iraqi foreign minister’s advisor.

In the gathering, attended by the representatives of various Iranian and Iraqi ministries and organizations, the two sides discussed the general framework of the arrangements for dredging and clean-up of Arvand Rud, and agreed that the joint operational ideas would be submitted to the high-ranking officials of the two countries to be agreed upon and implemented.

Prior to the talks, the interim technical task force on dredging Arvand Rud had held a meeting, during which technical experts from the two countries held negotiations on a timetable for the operations regarding the clean-up of Arvand Rud, according to the Foreign Ministry’s official website.

Back in May, Iranian and Iraqi authorities signed the proceedings of a meeting that had been held to study the technical issues of dredging Arvand Rud.

Tehran and Baghdad have already signed an agreement to resolve disagreements over Arvand Rud based on the 1975 Algiers Accord, which deals with border issues and norms of good neighborliness.

SOurce:http://www.iran-bn.com/2019/07/05/iran-iraq-coordinate-plans-to-dredge-border-river/

July 10, 2019

Iran, Iraq, Syria to Create Transport Corridor

High-ranking officials from Iran, Syria, and Iraq have agreed to create “a multimodal transport corridor” a part of efforts to boost trade relations between the three Muslim nations.

“The three friendly and brotherly countries of Iran, Iraq, and Syria have good and growing business relations,” Iranian Deputy Minister of Roads and Urban Development Shahram Adamnejad told the Tasnim News Agency.

“Given the actual and potential capacities created by the bilateral agreements between the three countries as well as the prospect of increasing these exchanges in the near future, we will witness a new chapter of trade prosperity in the territories of the three countries,” he added.

“Accordingly, the three countries have agreed to establish a multimodal transport corridor on the route from Iran to Iraq and Syria, and vice versa,” the deputy minister went on to say.

Speaking at a trilateral meeting between the state-owned Iraqi Republic Railways (IRR) and its Iranian and Syrian counterparts, the IRR Managing Director Talib Jawad Kazim praised Iran’s achievements in the railroad industry and said the sanctions have made Iran archive great successes.

He further pointed to the railroad project connecting Iran’s Shalamcheh to Iraq’s Basra and said his country is willing to speed up the project so that the two countries’ rail networks are connected to each other and then connected to Syria.

During Iranian President Hassan Rouhani’s visit to Iraq in March, the two countries signed five deals to promote cooperation in various fields.

The documents entail cooperation between Iran and Iraq concerning the Basra-Shalamcheh railroad project, visa facilitation for investors, cooperation in the health sector, and agreements between the Ministry of Industry, Mines and Trade of Iran and Ministry of Trade of Iraq, and another one in the field of oil between the petroleum ministries of the two countries.

Iran’s Minister of Industry, Mine and Trade Reza Rahmani has said that Tehran and Baghdad have agreed to reach the target of raising the value of annual trade exchange to $20 billion within two years.

Source:http://www.iran-bn.com/2019/07/04/iran-iraq-syria-to-create-transport-corridor/