Kuwait Finance House: Kuwaiti project awards reach $1.9 billion in the third quarter

The total value of projects awarded in Kuwait during the third quarter of 2026 fell by 57.3% year-on-year to $1.9 billion, down from $4.4 billion in the third quarter of 2025, according to data from Mideast Projects. A report by KAMCO Invest stated that the total value of contracts awarded in Kuwait also declined on a quarterly basis, albeit at a slower pace, dropping by 3.8%, reflecting the impact of regional instability caused by the war. The report noted that the energy sector accounted for more than 58%, equivalent to $1.1 billion, of the value of projects awarded in Kuwait during the quarter, while the gas sector accounted for 22.7%, valued at $424 million. Meanwhile, the total value of projects awarded in the construction sector nearly doubled to $250 million in the third quarter of 2026, compared to $127 million in the same period of 2025.

The report highlighted that the most prominent contracts awarded in Kuwait during the quarter included a $445 million contract for the fourth phase of the gas turbine project with a production capacity of 900 megawatts at the Subiya power generation and desalination plant, awarded by the Ministry of Electricity, Water and Renewable Energy. The project is expected to add 900 megawatts to the country’s electricity generation capacity through combined-cycle gas turbine units integrated with the existing power generation and desalination plant. It is also expected to include the supply, installation, operation, and maintenance of gas turbines, steam turbines, and heat recovery steam generators.

Other notable projects awarded in Kuwait included a $379 million contract to construct a water separation facility at the GC-25 gathering center and an injection facility at the GC-30 gathering center in northern Kuwait, aimed at increasing the handling capacity for gas, crude oil, and produced water. The project involves installing three-phase wet separators with a capacity of 150,000 barrels per day, a low-pressure gas separation vessel with a capacity of 53 million standard cubic feet per day, and a produced water balancing tank with a capacity of 240,000 barrels per day equipped with a high-capacity transfer pump.

On the level of the Gulf Cooperation Council (GCC) countries, the KAMCO Invest report stated that the total value of contracts awarded fell by 37.2% year-on-year to $47.4 billion, compared to $75.6 billion in the third quarter of 2025. Although all GCC countries recorded annual declines during the third quarter of 2026, the value of awarded contracts in the Gulf states improved by 2.5% during the first nine months of the year, reaching $204.1 billion, compared to $199.1 billion in the same period of 2025. All Gulf countries recorded annual declines in the double digits, with Oman recording the largest drop of 96.6%, bringing contract values to $76 million. Conversely, Saudi Arabia led the GCC countries with contract values of $24.4 billion, followed by the UAE with $15.6 billion, and then Qatar with $5.2 billion. On a quarterly basis, contract values in the Gulf states fell by 19.2%, while Qatar and Bahrain recorded growth of 76.1% and 4.3%, respectively.

The report attributed the slowdown in contract awards to ongoing regional geopolitical disruptions, including energy export disruptions, trade route interruptions, and damage and attacks targeting energy infrastructure.

Economic pressures: According to the Institute of Chartered Accountants in England and Wales (ICAEW) and Oxford Economics, the Gulf economies are expected to contract by 6.4% in 2026 before resuming growth at 5.8% in 2027, due to the repercussions of regional conflict-related disruptions. The energy sector in the Gulf is also expected to contract by 26.9% in 2026 before growing by 25.9% in 2027. Disruptions in energy exports directly affect the ability of Gulf states to finance and award planned contracts. Saudi Arabia’s economy is projected to contract by 4.6%, and the UAE’s economy by 1.5%, in 2026.

Sector performance: On a sectoral level, only the chemicals and gas sectors out of eight sectors recorded annual growth in the value of awarded contracts during the third quarter of 2026. The value of contracts in the chemicals sector jumped nearly fivefold to $3.5 billion, compared to $750 million in the third quarter of 2025, while gas sector contracts rose by 59.9% to $13.5 billion, up from $8.4 billion. In contrast, the construction sector, which recorded the highest value of awarded contracts in the region, saw its contract value decline by 44.7% year-on-year to $14.8 billion.

■ Kuwaiti construction contracts nearly double to $250 million

■ Al-Bokhait project adds 900 megawatts to electricity generation capacity

■ Saudi Arabia leads Gulf contract awards with contracts worth $24.4 billion

■ Upcoming Gulf projects reach $2.05 trillion

■ Gulf project market growth prospects: Despite the ongoing conflict between the United States and Iran in the region, the outlook for the Gulf project market has improved in both the short and long term. According to MEED data, the current value of upcoming projects in Gulf countries stands at approximately $2.05 trillion, with Saudi Arabia accounting for more than 49.7% of this total, followed by the UAE with a 26.4% share. The construction sector is expected to account for 38.3% of upcoming projects, followed by transport at 16.8%, and energy at 15.9%.

The data centers sector stands out among key active fields, as the Gulf market tracks more than 174 major ongoing and planned projects in GCC countries, with a total value exceeding $93 billion. Notable among these is a $5 billion project to develop data center infrastructure at Oxagon, part of NEOM. Additionally, Amazon Web Services (AWS) plans to launch a new data center region in Saudi Arabia in 2026, while the cost of constructing and equipping the “Khazna AI Data Center” in Ajman is expected to reach approximately $272 million.