Saudi Aramco has officially awarded $25bn-worth of contracts for engineering, procurement and construction (EPC) works and other services for two of its major gas expansion programmes.

The Saudi energy giant held a signing ceremony on 30 June at its headquarters in Dhahran to award contracts for the third expansion phase of the Master Gas System (MGS-3) and the second expansion phase of the Jafurah unconventional gas development. Contracts for new gas rigs and ongoing capacity maintenance projects were also awarded during the ceremony.

MEED previously reported that Aramco had invited successful contractors and service providers for the two projects to a contract signing ceremony on 30 June. The function was originally scheduled to take place on 30 May.

Saudi Energy Minister Prince Abdulaziz Bin Salman and Amin Nasser, Aramco's president and CEO, attended the gathering on 30 June. 

“These contract awards demonstrate our firm belief in the future of gas as an important energy source, as well as a vital feedstock for downstream industries,” Nasser said. “The scale of our ongoing investment at Jafurah and the expansion of our Master Gas System underscores our intention to further integrate and grow our gas business to meet anticipated rising demand.”

Aramco has been set a target of increasing its gas production by 60% by 2030, with 2021 as its baseline, the company revealed in its 2023 financial results.

MGS-3 EPC packages

Aramco announced it has awarded 15 lump-sum turnkey contracts for the MGS-3 project, worth $8.8bn.

The expansion, “being conducted in collaboration with the ministry of energy”, will increase the size of the network and raise its total capacity by an additional 3.15 billion standard cubic feet a day by 2028, through the installation of about 4,000 kilometres of pipelines and 17 new gas compression trains, the company said on 30 June.

Aramco has divided EPC works on the MGS-3 project into 17 packages. The first two packages involve upgrading existing gas compression systems and installing new gas compressors. The 15 other packages relate to laying gas transport pipelines at various locations in the kingdom.

Aramco selected the following contractors for 15 of the 17 EPC packages of the estimated $10bn MGS-3 project, MEED reported in February:

• Package 1 – China Petroleum Engineering & Construction Company (China)
• Package 2 – Sepco (China)
• Packages 3 and 12 – Gas Arabian (Saudi Arabia)
• Package 4 – Mapa (Turkiye)
• Package 5 – Bin Quraya (Saudi Arabia)
• Packages 6 and 7 – Sinopec Petroleum Services (China)
• Package 8 – Larsen & Toubro Energy Hydrocarbon (India)
• Packages 10 and 14 – Nesma & Partners (Saudi Arabia) / Sicim (Italy)
• Package 11 – Max Streicher (Germany) / National Basics Company (Saudi Arabia)
• Packages 13, 15 and 17 – Kalpataru Projects International (India)

Contractors recently submitted revised commercial bids for package nine of the project. This package was part of the original tendering exercise for the project, but the award process was delayed due to Aramco asking bidders to submit revised prices.

Separately, package 16 of the MGS-3 project has been carved out as a separate tender by Aramco. Contractors were due to submit their bids for package 16 by 30 June.

Jafurah second expansion phase

Aramco also awarded 16 contracts, worth a combined total of about $12.4bn, for the second expansion phase of the Jafurah unconventional gas development.

The work on the project will involve construction of gas compression facilities and associated pipelines and expansion of the Jafurah gas plant, including construction of gas processing trains, utilities, sulphur and export facilities, Aramco said in its statement.

“It will also involve construction of the company’s new Riyas natural gas liquids (NGL) fractionation facilities in Jubail – including NGL fractionation trains and utilities, storage and export facilities – to process NGL received from Jafurah,” the company added.

Last September, MEED reported that Aramco had selected contractors for the estimated $10bn Jafurah second expansion phase. Aramco officially issued the EPC contracts in late October.

The main EPC packages of the Jafurah second expansion phase project, their estimated values and the selected contractors are:

• Package 1 – gas processing plant and main process units – $2.9bn: Larsen & Toubro Energy Hydrocarbon (India)
• Package 2 – utilities and offsites – $2.4bn: Hyundai Engineering (South Korea)
• Package 3 – gas compression units – $1bn: Larsen & Toubro Energy Hydrocarbon
• Riyas NGL package 1 – NGL fractionation trains – $1bn: Tecnicas Reunidas (Spain)
• Riyas NGL package 2 – utilities, storage and export facilities – $2.2bn: Tecnicas Reunidas

In October, Indian industrial services conglomerate Larsen & Toubro announced that its subsidiary Larsen & Toubro Energy Hydrocarbon had won the contract for the main gas compression system of the Jafurah second expansion phase project from Aramco.

The total value of the Indian firm's EPC contracts with Aramco is close to $4bn, making it the contractor with the largest share of work on the Jafurah second expansion phase.

Hyundai E&C in April held a groundbreaking ceremony for package two of the project. The scope of work on the package mainly involves EPC of utilities and offsite facilities at the Jafurah second expansion phase project.

Power Construction Corporation of China (PowerChina) announced in October that its subsidiary, Eighth Hydropower Bureau, had won a contract from Aramco to build industrial facilities to serve the Riyas NGL project.

Following the completion of EPC works, the Riyas NGL project will be connected to package six of the first phase of the Jafurah unconventional gas development via a 320 kilometre pipeline. Eighth Hydropower Bureau is also the contractor for Jafurah’s first phase package six, for which EPC works are progressing.

Located in Saudi Arabia’s Eastern Province, the Jafurah basin hosts the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. This shale play covers an area of 17,000 square kilometres.

On 30 June, Aramco also awarded contracts for an additional 23 gas rigs, worth $2.4bn, along with two directional drilling contracts worth $612m, for the Jafurah unconventional gas development.