April 30, 2024

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The Fadhili gas plant in Saudi Arabia (GS E&C)

South Korean builders Samsung E&A and GS Engineering & Construction have secured a contract worth a combined total of $7.2 billion for the construction of a substantial gas plant in Saudi Arabia, the two companies announced Wednesday.

The landmark deal represents the largest plant construction agreement secured by Korean companies in the kingdom.

The two firms signed an engineering, procurement and construction contract with Aramco, Saudi Arabia's state-run oil giant, in Dhahran, Saudi Arabia, on Tuesday. The project aims to drastically expand the capacity of an existing gas plant located some 350 kilometers northeast of Riyadh, Saudi's capital, by November 2027.

Samsung alone has secured orders worth some $6 billion that involve the construction of a gas processing facility package and a utilities and auxiliary facility package while GS will be responsible for building a sulfur recovery treatment facility worth about $1.2 billion.

Upon completion, the daily gas production output at the plant is to increase from 71 million cubic meters to 108 million cubic meters.

The contract further solidifies Samsung E&A's position in Saudi Arabia's gas sector, adding to its ongoing projects like the Jafurah gas processing and Unayzah gas storage initiatives.

Samsung E&A credited the success of the deal to its past projects with Aramco. "We have successfully demonstrated innovative performance in previous Aramco projects, which have enhanced our competitive edge in the market," a Samsung E&A official said.

Meanwhile, GS E&C's sulfur recovery treatment facility aims to recover sulfur, a toxic substance found in the gas produced in oil fields. The process not only enhances gas quality but also contributes to reducing pollution.

GS E&C's scope of work encompasses the construction of three sulfur recovery installations, each capable of recovering 800 metric tons of sulfur per day.

"Based on the diverse construction capabilities amassed both domestically and internationally over the past five decades, coupled with experience in numerous overseas EPC plant projects, we can ensure the successful execution (of this project)," a GS E&C official said.

Despite a downturn in orders for overseas plant projects in recent years due to falling oil prices, the two companies aim to revitalize their international operations with such achievements moving forward.

Meanwhile, Saudi Arabia is working to expand its gas business by investing in unconventional gas reserves and employing advanced extraction methods to meet the increasing demand for cost-effective energy, as reported by industry sources.

By Kim Hae-yeon (hykim@heraldcorp.com)
The Korea Herald