Hyundai wins $1.7 bn natural gas field project order from Aramco

South Korea’s Hyundai Engineering Co. and Hyundai Engineering & Construction Co. (Hyundai E&C), both carmaker giant Hyundai Motor Group affiliates, said on Nov. 30 that their joint venture won a 2 trillion won ($1.7 billion) order from The Saudi Arabian Oil Company (Aramco) for the Jafurah unconventional gas field development.

The Hyundai consortium will construct sulfur recovery units as well as utility and offsite infrastructure. Hyundai Engineering and Hyundai E&C hold 55% and 45% stakes in the JV, respectively. 

The 2 trillion won order is part of the initial contracts Aramco has awarded to Saudi Arabian and global companies to develop the gas field. On Nov. 29, Aramco stated it has already awarded subsurface and engineering, procurement and construction (EPC) contracts worth $10 billion, with capital expenditures for Jafurah expected to reach $68 billion during the first 10 years of development.

The largest natural gas field in Saudi Arabia, stretching 170 kilometers by 100 kilometers, is expected to produce up to 2 billion standard cubic feet per day (scfd) of sales gas, 418 million scfd of ethane and around 630,000 barrels per day of gas liquids and condensates by 2030, the Saudi Arabia's state-run oil giant said.

The two Hyundai affiliates won the project based on their longstanding presence in the Middle East market. They together won a $6.4 billion oil refinery construction project in south Karbala province of Iraq in 2014 and a $2.9 billion order to build the Al-Zour liquefied natural gas plant in Kuwait in 2016. 

Hyundai Engineering has been expanding its EPC-related orders from global large-scale construction projects. In 2019, it won a €993 million deal to build a polypropylene plant in Police, Poland. In May of this year, the Korean company and Spanish engineering firm Técnicas Reunidas S.A. signed a 2.7 trillion won contract to expand a petrochemical facility of Poland’s state-run refinery company PKN Orlen. The Korean company also won a $256 million order from Thailand's third-largest petrochemical company IRPC Pcl. to upgrade its refinery in August. 

Meanwhile, Hyundai E&C completed the $1.4 billion Karan Onshore Gas Processing Plant construction project in 2012 and the $800 million Uthmaniyah Ethane Deep Recovery Facility was finalized in 2019, both orders from Aramco. It has been also constructing two oil refinery packages of Aramco's Marjan Development Program, worth $2.7 billion, since 2019.

Write to Kyung-Min Kang at kkm126@hankyung.com
Jihyun Kim edited this article.