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GCCIA to Begin Interconnection with Iraq

Minister Ziyad Fadel discussed in Saudi Arabia proceeding with the Gulf interconnection project and proposals for its development (Iraqi electricity)
Minister Ziyad Fadel discussed in Saudi Arabia proceeding with the Gulf interconnection project and proposals for its development (Iraqi electricity)
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GCCIA to Begin Interconnection with Iraq

Minister Ziyad Fadel discussed in Saudi Arabia proceeding with the Gulf interconnection project and proposals for its development (Iraqi electricity)
Minister Ziyad Fadel discussed in Saudi Arabia proceeding with the Gulf interconnection project and proposals for its development (Iraqi electricity)

The Gulf Cooperation Council Interconnection Authority (GCCIA) will launch Thursday the implementation of the electrical interconnection project with the southern Iraq network, which is expected to be operational by the end of next year.

The governor of the Eastern Region, Prince Saud bin Naif bin Abdulaziz, will inaugurate the ceremony in the presence of GCC Sec-Gen Jassim al-Budaiwi, and Gulf and Iraqi ministers.

Chairman of the GCCIA Board Mohsen al-Hadrami asserted the importance of the event at the level of Gulf countries, reiterating that the project will boost cooperation with Iraq.

Hadrami indicated that energy security is one of the most important axes of cooperation developed through exchange between the GCC countries and Iraq, noting that it is the first step to expand outside the Gulf grid system by linking neighboring countries such as Turkey, Jordan, and Egypt.

The project is in line with the vision of the GGCC and the GCCIA to expand connectivity with the neighboring grid, reaching Europe, Africa, and Asia.

CEO of GCCIA Ahmed al-Ebrahim considered the interconnection project a key strategic project in the Gulf and one of the most important infrastructure interconnection projects approved by the GCC leaders.

He indicated that the project aims to achieve its main strategic goals of enhancing energy security, increasing reliability, and ensuring safety for Gulf grids.

Meanwhile, Iraqi Minister of Electricity Zial Fadhil visited the GCCIA headquarters in Saudi Arabia as part of his visit to the Kingdom.

Fadhil discussed the interconnection project and network stability.

He also reviewed the developments related to the required contracts, the stages completed, the implementation plan, and the connecting lines inside Kuwait.

In July 2022, the Gulf Interconnection Authority (GCCIA) signed the contract between its network and the electricity grid of southern Iraq on the sidelines of the Jeddah Security and Development Summit.

The contract includes the authority's construction of lines from its substation in Kuwait to the al-Faw station in southern Iraq to supply it with about 500 megawatts of energy from the Gulf countries. Construction will take about 24 months, with a total transmission capacity of 1,800 megawatts.

Last February, the authority concluded five contracts with the companies executing the project at a total cost of more than $200 million.

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Saudi Non-Oil Exports Reach Highest Levels Since 2022

A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
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Saudi Non-Oil Exports Reach Highest Levels Since 2022

A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
A view of the Jeddah Islamic Port. (Asharq Al-Awsat)

Saudi Arabia’s non-oil exports have reached their highest levels since the second quarter of 2022, continuing to grow at a steady pace. By the end of the third quarter of this year, non-oil exports, including re-exports, totaled SAR 80 billion (USD 21 billion), reflecting a 16.8% increase compared to the same period in 2023.

This growth aligns with the goals of Vision 2030, which aims to diversify Saudi Arabia’s economy and reduce reliance on oil revenues. Credit rating agency Moody’s recently upgraded Saudi Arabia’s credit rating to AA3 from A1 with a stable outlook, citing the Kingdom’s ongoing economic diversification and the strength of its non-oil private sector. Moody’s projects the non-oil private sector’s GDP to grow by 4–5% annually in the coming years.

According to data from Saudi Arabia’s General Authority for Statistics, non-oil national exports (excluding re-exports) grew by 7.6% in the third quarter of 2024, reaching SAR 57 billion (USD 15.1 billion). Re-exports saw a remarkable surge of 48.4%, amounting to SAR 23 billion (USD 6.1 billion).

In contrast, total merchandise exports dropped by 7.7% to SAR 276 billion (USD 73.5 billion) due to a 14.9% decline in oil exports. As a result, the share of oil exports in total exports decreased from 77.3% in the third quarter of 2023 to 71.3% this year.

Chemical industry products accounted for 25.5% of non-oil exports, growing by 5.3% compared to the same period last year. Plastics, rubber, and their derivatives followed closely, representing 24.9% of non-oil exports, with an 8.9% increase from the third quarter of 2023.

China remained Saudi Arabia’s top export destination, accounting for 15.2% of total exports in the third quarter of 2024. Japan and South Korea followed, at 9.3% and 9.2%, respectively. Other major destinations included India, the UAE, the US, Poland, Egypt, Bahrain, and Taiwan. Together, these ten countries accounted for 66.4% of Saudi exports.

Experts emphasize that the growth in non-oil exports strengthens Saudi Arabia’s economy and reflects the success of its diversification strategy under Vision 2030.

Shura Council member Fadhel Al-Buainain highlighted the importance of considering the scale of Saudi non-oil exports during the third quarter of 2024. He emphasized two key aspects of Saudi non-oil exports.

First, the 16.8% growth achieved is a significant leap that boosts the Saudi economy’s ability to continue strengthening non-oil exports, which are a focal point of Vision 2030 and its economic diversification goals.

Second, he said the 48.4% increase in the value of re-exported goods represents substantial growth, reflecting the Kingdom’s potential to play a pivotal role in regional re-export activities. This, in turn, can stimulate exports and position Saudi Arabia as a global logistics hub.

He further noted that the increase in export value compared to the second quarter of this year, amounting to SAR 37.2 billion (USD 9.92 billion) or 15.6%, indicates sustained and accelerating export growth.

Al-Buainain believes that Saudi Arabia’s ports on the Red Sea and the Arabian Gulf are well-equipped to play a central role in re-exporting, supported by free economic zones, robust infrastructure, and a well-established transportation and logistics network.

He also stated that the improvement in global demand, particularly in the petrochemical sector, which accounted for the largest share of exports, contributed to this growth.

However, the global economic conditions may face certain challenges that will reflect negatively on global demand, he remarked, stressing the importance of diversifying exports.

Dr. Osama Al-Obaidi, an international commercial law consultant and professor, told Asharq Al-Awsat that the significant increase in non-oil exports in the third quarter of this year compared to the same period in 2023 is linked to the growth in petrochemical exports, particularly plastics, rubber, and their derivatives.

He explained that this rise reflects the effectiveness of Saudi Arabia’s economic diversification efforts and its reduced reliance on oil as a sole income source, in line with Vision 2030.

It also highlights the success of the substantial investments made by the government to develop ports and logistics services, such as King Abdulaziz Port in Dammam and Jeddah Islamic Port.

Moreover, improvements in domestic, regional, and international airports, along with initiatives to promote local industries—particularly chemicals, food products, pharmaceuticals, and other high-demand goods in foreign markets—have also played a pivotal role.