Hyundai Engineering and Hyundai Construction Win 2 Trillion KRW Contract for Saudi Jafurah Gas Processing Facility

Secured Ultra-Large EPC Project Worth Approximately KRW 2 Trillion from Saudi Aramco
Hyundai Engineering & Hyundai Construction Joint Venture (JV) Recognized for Technical Expertise and Project Management Capabilities
Securing Large-Scale Projects in the Middle East Following Europe to Ensure Portfolio Stability

On the 29th (local time), the contract signing ceremony for the 'Saudi Jafurah Gas Processing Facility' held in Saudi Arabia. Kim Chang-hak, President of Hyundai Engineering (left), and Abdulkarim Al-Ghamdi, Vice President of Aramco, have completed signing and are taking a commemorative photo.

[Asia Economy Reporter Kangwook Cho] Hyundai Engineering and Hyundai Construction have joined forces to successfully secure a massive gas plant construction project worth approximately 2 trillion KRW from Saudi Arabia's state-owned oil company, Aramco.

The joint venture (JV) formed by Hyundai Engineering and Hyundai Construction announced on the 30th that it has signed a contract for the "Saudi Arabia Jafurah Gas Processing Facilities Project." The contract amount is approximately 2 trillion KRW. The shareholding ratio is Hyundai Engineering (lead company) 55% and Hyundai Construction 45%.

The "Saudi Arabia Jafurah Gas Processing Facilities Project" involves constructing facilities to process gas produced from the Jafurah gas field located 150 km southwest of Dammam, Saudi Arabia, as well as sulfur recovery facilities. The Hyundai Engineering consortium is responsible for the Sulfur Recovery Units package and utility infrastructure (Utility & Offsite).

The Hyundai Engineering-Hyundai Construction JV was selected as the final successful bidder, overcoming competition from global rivals, by being recognized for its outstanding technological capabilities and project management skills by Saudi Aramco, the world's largest energy and chemical company.

This contract win is analyzed to be based on the successful experience of Hyundai Engineering and Hyundai Construction working together as a team to lead large-scale plant projects. The two companies previously secured and successfully completed the approximately $2.9 billion "Kuwait Al-Zour LNG Import Terminal Project" in 2016. Additionally, Hyundai Engineering and Hyundai Construction have jointly participated in large projects in the Middle East, such as the "Iraq Karbala Refinery Project," demonstrating top-level plant project execution capabilities.

In fact, Hyundai Engineering is expanding its orders linked to 'FEED-EPC' based on its technological competitiveness and project execution experience in the Front-End Engineering Design (FEED) field. In May, Hyundai Engineering secured the approximately 2.7 trillion KRW "PKN Olefin Expansion Project." Following the 2019 "Poland Polimery Police PDH/PP Plant," it is evaluated to have successfully established itself in the European Union (EU) plant market with consecutive mega-project wins in Europe.

Moreover, Hyundai Engineering is performing FEED projects in Russia, the United States, and Malaysia, and it is expected that these will likely lead to EPC orders. By continuing to secure orders in Europe, Russia, the United States, and Southeast Asia, the company is reaping the fruits of its market diversification strategy.

Hyundai Construction has successfully executed Aramco projects including the Karan Gas Processing Facility ($1.4 billion, completed in 2012) and the Uthmaniyah Gas Processing Facility ($800 million, completed in 2019), and began construction in 2019 on the $2.7 billion Mazan Development Program Package 6 and Package 12, which are ongoing.

Since entering Saudi Arabia in 1975, Hyundai Construction has stably executed a total of 157 projects worth approximately $18.7 billion (about 22 trillion KRW), including the historic Jubail Industrial City. Currently, it is carrying out 10 projects worth $3.4 billion, including Mazan Development Program Packages 6 and 12 and multiple transmission line and substation projects ordered by the Saudi Electricity Company, earning recognition from the Saudi government and clients for its excellent construction capabilities and technology.

A Hyundai Engineering official stated, "Our market diversification strategy has successfully taken root, and it is significant that our technology and project execution capabilities have been recognized in the Middle East, a traditional stronghold for orders, leading to the award of this mega-project." He added, "Based on the synergy of the Hyundai Construction and Hyundai Engineering JV, we will build trust with client Aramco and do our best to ensure successful project execution."