Abu Dhabi growth offsets Dubai real estate crash
Posted on 03 November 2009 with no comments from readersIf you read the business headlines in the UAE on a daily basis then the ascendency of Abu Dhabi over heavily-indebted and real-estate-crash-struck Dubai is only too clear.
Abu Dhabi now has $100 billion worth of active projects and that probably equals or exceeds those actually under development now in Dubai. Many executives who have lost their Dubai jobs have moved to Abu Dhabi or make the commute.
UAE stability
This is a remarkable natural stabilizer for the UAE economy as a whole. If it was reliant on Dubai the picture would not be very bright.
Dubai still has a long way to go until a recovery can truly be proclaimed. The debt mountain is still growing as bond issues are sold, and it needs to shrink. Many individuals and companies have lost huge sums on property that they also now owe to the banks, and late invoice payments are a pandemic.
In Abu Dhabi the government keeps on spending, and with oil prices back up there is even a nice surplus to pay for it. Abu Dhabi Gas Industries just announced the signing of four landmark deals worth a cool $9 billion for completion by Q3 2013.
The figure of $30 billion over the next three years is bandied around for oil and gas in Abu Dhabi. That is infrastructure with a guaranteed return. So much for Peak Oil this is New Oil.
Cheaper construction
There is even a sense in which Abu Dhabi can profit from the global financial crash. The impact on construction and heavy engineering costs has been huge, and this bonus is past back to the client.
Dubai will benefit too, of course. Abu Dhabi imports will pass through Jebel Ali, its wealthy citizens will continue to treat Dubai as a playground and experienced expatriates will be able to stay in the UAE.
Whether Abu Dhabi’s expansion will be enough to pull the UAE out of the recession of 2009 is less certain. If the assumption is that the world is now back on an uptrend that might well be true, but if there is another lurch down then the UAE will suffer as well.
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Abu Dhabi, 4th Nov. 2009 (WAM) — TAKREER (Abu Dhabi Oil Refining Company) announced today that two Contracts worth $ 5.2 billion have been awarded to two international companies as part of the overall plan to expand the oil refining capacity in the Ruwais refinery.
The Contracts are for “Engineering, Procurement, Construction and Commissioning” (EPC) works for two packages of the Ruwais Refinery Expansion Project which comprises of seven EPC packages.\
Eight companies competed for these two contracts. SK Engineering & Construction Co. from South Korea was awarded package No. 1 for a total value of US$ 2.1 billion for the Crude Distillation Unit & Associated Downstream Units and GS Engineering & Construction Corp. also from South Korea was awarded Package No. 2 for a total value of US$ 3.1 billion for the Residue Fluid Catalytic Cracking Unit & Associated Refining Units.
The Ruwais Refinery Expansion Project which consists of seven different packages is aimed at increasing the crude oil refining capacity by 417,000 barrel per day with latest advanced Technology for down stream processing units to produce higher quality products. The new Refinery has been designed to comply with U.A.E. and International Environmental Standards.
The other packages comprising of Offsites & Utilities, Tankage & Associated Interconnecting Piping, Marine Facilities and Non-Process Buildings will be concluded soon.
TAKREER, a subsidiary of Abu Dhabi National Oil Company (ADNOC), stated that the PROJECT is due to meet commercial production by end of 2013.
© Copyright Emirates News Agency (WAM) 2009.