Agility eyes a bigger slice of Middle East's energy sector
Kuwait-based logistics firm is bullish on oil and gas projects in the region
Agility, one of the region’s largest logistics firms, expects to win a larger share of oil and gas projects in Mena as governments ramp up spending to boost production, company executives said.
Listed in Dubai and Kuwait, Agility expects $300 million out of $800m of its targeted Ebitda by 2020 to come from its logistics business, said Grant Wattman, president and chief executive of Agility Project Logistics. The company also has an infrastructure unit.
"The Middle East is still a hotspot for us in terms of investments," Mohammad Jaber, Agility's chief operating officer and regional director of project logistics told The National.
“Year-on-year we’re growing in the Middle East and Africa region, especially in the GCC and that’s in line with the GCC recent announcements $288bn of new projects in infrastructure and energy sector as well as healthcare."
Arabian Gulf countries are boosting their spending on oil and gas projects as they seek to take advantage of rising prices, increase exports and meet local energy needs.
In the UAE, where Agility has supported the development of offshore islands for Abu Dhabi National Oil Company, remains bullish on the prospects for more such projects as Abu Dhabi looks to invest $109bn over five years. The investment includes sour gas development, such as the ramp up of production in the Hail, Ghasha and Dalma fields announced this year.
The company expects to win 10 per cent of an estimated $800 million worth of logistics projects related to sour gas and onshore field development that will come online in 2018 and 2019 in Abu Dhabi, said Mr Jaber.
The logistics firm is also looking to support engineering, procurement and construction packages from projects by Adnoc Refining and Adnoc Onshore this year.
“More of those projects are happening offshore where we will see big demand on onshore supply basis and that’s where Agility immediately in advance invested in Mussaffah and in Kizad, as well as into marine assets - supply vessels, barges, and these are extremely expensive logistics assets,” said Mr Jaber.
The company, which used to be the main food supplier to the US army in Iraq, expects to secure more US governments contracts after last year's settlement of a US criminal case that had dragged on for years.
"Yes, we are active in tendering and pursuing surprisingly a significant number [of contracts]," said Mr Wattman.
In its third-quarter earnings, Agility's revenue for its logistics business grew by 19.4 per cent to 273 million dinars ($909m) thanks to growth from the Middle East and North Africa.
Agility is also bullish on its home market after state oil Kuwait Petroleum Corporation announced earlier in the month that it would invest $500bn in oil and gas projects by 2040. Around $114bn of the capex will be invested over the next five years as the Opec producer looks to boost upstream production to 4.75 million barrels per day over the next two decades.
The firm is also eyeing the slew of projects coming from Saudi Arabia's gas and utilities projects as well as Bahrain. Agility is also seeking projects in Iraq, with the opening up of an estimated $60bn worth of projects amid a reconstruction programme.
Updated: February 8, 2018 08:25 PM