Delays ahead for energy plants in Mideast: Expert



“We’ve seen delays and cancellations here and around the world already and you’re going to see more of it,” Anne Keller of Jacobs Consultancy told an energy conference. Keller said over the next five years the Arab Gulf region needed an extra 700,000 workers just to build around $ 450bn worth of planned oil and gas processing plants, refineries and petrochemical complexes.

The workforce is short 100,000 engineers and contractors, and another 600,000 labourers and construction workers, she said. “That looks like a very difficult challenge,” she said. “Most of these projects will go ahead, but just not on their current schedules. They will be phased.”

The number of workers needed across the whole economies of the region was even larger. The downstream energy projects make up only a third of the $ 1.2 trillion of engineering and construction schemes planned across the region’s economies.

The global oil and gas industry is struggling to bring online new capacity to meet rapidly growing energy demand. Tight energy service and labour markets and rising costs of raw materials have pushed costs up, and the Middle East has seen particularly fast inflation, she said.

“Middle East project costs have increased by 50-60 percent or more over the last two years,” she said. “This more than in the rest of the world.” In February Exxon Mobil blamed spiralling costs as it dropped a multi-billion dollar gas-to-liquids scheme in Qatar.

A new refinery project in Kuwait was delayed after the country deemed bids for the scheme too high. Some of them were over twice Kuwait’s initial budget estimate.



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