The $1.6 billion gas turbine order has been finalized in the United Arab Emirates, and China Energy Engineering Corporation adopts the EPC model in the Middle East to win time for domestic internal combustion engine enterprises.

Chinese contractors are securing projects in the Middle East faster than domestic heavy-duty gas turbines are catching up with international standards.

Foresee Energy noted that at the recent China International Import Expo, the China Energy Engineering Corporation (CEEC) trade delegation signed a procurement order worth 1.627 billion US dollars, among which the gas turbine equipment purchased from Siemens will be installed in the 2600MW Tejila C peak-shaving power station in Abu Dhabi, the United Arab Emirates.

The same signing information also contains another clue: the wind turbines and photovoltaic modules purchased at the previous CIIE have already arrived at the construction sites of Saudi Arabia's PIF5 wind power project and the 2GW Forris photovoltaic project. While the scale of new energy EPC is expanding across the Middle East, the core power of gas turbines still has to be purchased from Siemens.

The two events combined point to the same problem, Chinese contractors are winning projects in the Middle East one step faster than domestic heavy-duty gas turbines can catch up with international standards.

The 1.6 billion US dollar purchase is the qualification to get the owner's approval

Tejila C is a dual-fuel combined cycle peak-shaving power station with a net output of 2600MW, equipped with supporting photovoltaic facilities to smooth load fluctuations, and is scheduled to be put into commercial operation in 2029. The EPC contract was signed in June 2026 with an amount of 1.687 billion US dollars, and the CEEC consortium is responsible for the whole process including design, supply, construction, installation, commissioning and maintenance during the warranty period.

The core equipment supplied by Siemens is three SGT5-9000HL heavy-duty gas turbines. This marks the first entry of HL-class gas turbines into the UAE, and it is also the third consecutive project that Siemens has won at this site. The gas turbines and steam turbines are manufactured in Berlin and Mühlheim, Germany, and the generators are produced in Charlotte, USA.

Breaking down the procurement order, what CEEC buys is equipment, but more accurately, it buys the "owner-acceptable technical solution" in the bidding for high-end gas power stations in the Middle East.

The vacuum pump procurement announcement for Tejila C is written very directly: the bidder must have "at least one performance of similar equipment for F-class and above gas turbine units or 400MW and above coal-fired units in overseas projects outside China that have been put into operation in the past three years". Even the access to a vacuum pump is bound to the performance of overseas F-class gas turbines, and the threshold at the main engine level will only be higher.

As the EPC general contractor, CEEC's procurement standard for gas turbines is not "whether it can be used", but "whether the owner recognizes it". Siemens' HL-class units are the pass to get the approval of UAE owners under current conditions.

This is not a technical surrender, but engineering rationality. The project construction period, grid connection conditions, and technical review by the owner's financiers are all there. The general contractor cannot gamble on a 2600MW peak-shaving power station with a unit type that has no similar overseas performance.

Domestic gas turbines are not non-existent, but have not yet reached the bidding threshold

China has its own heavy-duty gas turbine enterprises. The localization of F-class has completed the full series of independent controllability from 50MW to 550MW, the localization rate of 9F class has reached 70%-95%, the combined cycle efficiency has reached 61.66%, and many leading enterprises have the capacity of batch delivery.

The problem is not "whether it exists", but "whether it can reach the level of projects like Tejila C".

The gap in hard indicators is specific. The combined cycle efficiency of domestic F-class gas turbines is about 60%-61.66%, while the H/J class of the three global giants has reached 63%-64.5%. The efficiency difference of two to three percentage points, in the whole life cycle of natural gas power generation, corresponds to a fuel cost difference of tens of millions of yuan per year.

The gap in the initial gas temperature is more fundamental. The domestic F-class is about 1400℃, while the international mainstream H/J class exceeds 1600℃. Every 100℃ increase in temperature can improve the efficiency by 2-3 percentage points, and behind the temperature is the gap in basic capabilities of high-temperature alloys, thermal barrier coatings and cooling design.

In terms of single-unit power, the maximum domestic F-class is 550MW, and the combined cycle output of international H/J class can reach 650-870MW. For large backbone power stations, the single-unit capacity is directly related to the unit investment cost and floor area.

What is more difficult to cross than the parameters is the operating experience. The total commercial operation time of international mainstream models exceeds 100 million hours, while the domestic main models only have demonstration operation records of thousands to tens of thousands of hours. The value of a gas turbine does not lie in the design parameter sheet, but in the long-term reliability under tens of thousands of start-stop cycles, extreme working conditions and high temperature creep.

When Middle Eastern owners conduct bidding, they focus on "how long this machine has run under similar grid conditions" rather than "what the design efficiency of this machine is". The technical indicators of the domestic 300MW-class F-class prototype have reached the international mainstream F-class level, but there is still a distance from the complete machine delivery, while what Tejila C needs is HL-class.

The reason why CEEC does not buy domestic F-class for this project is not that it is unwilling, but that the domestic H-class has not reached the position where it can be bid. In the final analysis, the procurement standards of the general contractor have to pass three barriers: owner recognition, full life cycle cost, and overseas operation performance. Among the three barriers, the domestic H-class has not yet really completed any of them in overseas projects at present.

The scale advantage of new energy in the Middle East does not lie in gas turbines

Moving the sight away from the gas power stations in the Middle East, the share of CEEC and PowerChina in the Middle East photovoltaic EPC sector presents a different picture. The two enterprises undertake more than 60% of large-scale photovoltaic EPC projects in the Middle East region.

The two sub-projects of Saudi PIF5 wind power, 1GW Shakira and 2GW Stella, have entered the main construction stage, and the 2GW Forris photovoltaic project started module installation in September 2026. The delivery rhythm and cost control capability of these projects are the real stock advantages of Chinese contractors in the Middle East new energy market.

But the boundary of this advantage is also very clear. The EPC capability of photovoltaic and wind power can be built up through construction organization, supply chain management and localized resources, but the hot end components, control systems and long-term maintenance systems of gas turbines cannot be built in the same way.

CEEC is simultaneously promoting wind power, photovoltaic and gas peak-shaving power stations in the Middle East, and the three lines share project management experience and grid connection capabilities, but the "heart" of the gas turbine still comes from Germany. China's position in the Middle East energy market is a position whose scale can no longer be ignored, but whose value capture is concentrated in the construction and integration links.

The more projects are won, the more frequently this division of labor pattern is repeated. Scale advantage can bring projects, but cannot bring the discourse power of gas turbine main engines.

There is a short structural gap in the current global gas turbine market: The total order in hand of the three giants has exceeded 84GW, the delivery cycle has been scheduled to 2028-2030, and the global supply and demand gap exceeds 30GW. The production capacity of China's industrial chain can fill the gap, and the domestic F-class also has its own space in terms of delivery speed and cost.

But this window will not stay open forever. With the expansion of production by the giants, the contradiction between supply and demand will be alleviated, and the time left for domestic gas turbines to move from "being manufactured" to "being manufactured excellently" is about three to five years.

CEEC's procurement of HL-class gas turbines from Siemens for Tejila C is a reasonable engineering decision at present. Using the EPC scale of Middle East projects to obtain the binding relationship with leading OEMs and project resumes, while promoting H-class technology research and development domestically, this path has practical logic.

Foresee Energy believes that what needs to be watched is the risk of path dependence. When contractors continuously adopt gas turbines from the same OEM in multiple Middle East projects, the operation data, maintenance standards and spare parts system will gradually tilt towards this OEM, and the switching cost for later entrants will only be higher.

The 1.6 billion US dollar gas turbine order bought an admission ticket, and also bought a limited period of time. In this period, whether domestic gas turbines can accumulate operation performance recognized by owners in overseas projects will determine the position of Chinese contractors at the Middle East gas power station bidding table five years later, more than how many billions of dollars of procurement orders they have signed.