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• 
  Contractors express interest in sixth Jafurah expansion phase

  29 September 2026

  

   

  Contractors have expressed interest to Saudi Aramco in the next major expansion phase of the Jafurah unconventional gas development programme in Saudi Arabia.

  According to sources, the main scope of work for the sixth expansion phase of Jafurah involves the engineering, procurement and construction (EPC) of three gas compression plants at the gas basin in the kingdom’s Eastern Province. Each plant will be capable of processing up to 200 million cubic feet a day (cf/d).

  Aramco is said to have issued a solicitation of interest for the project in August, with contractors submitting responses within the same month, sources told MEED.

  The Jafurah basin is the largest liquid-rich shale gas play in the Middle East, spanning about 17,000 square kilometres. The reserve is estimated to contain 229 trillion cubic feet of gas and 75 billion stock-tank barrels of condensate.

  In December last year, Aramco brought the greenfield Jafurah gas processing plant online, with a production capacity of 450 million cf/d, marking the commissioning of the first phase of its $100bn capital expenditure programme to produce gas from the unconventional resource base.

  The company had previously stated it expected to start gas production at Jafurah in 2025, with the intention of progressively ramping up to 2 billion cf/d of sales gas, 420 million cf/d of ethane and 630,000 barrels a day (b/d) of high-value liquids by 2030.

  Aramco has said that its unconventional gas programme, at peak production, is expected to generate electricity equivalent to displacing 500,000 b/d of oil.

  In February 2020, Aramco received a capital expenditure grant of $110bn from the Saudi government for the long-term phased development of the Jafurah unconventional gas resource base. Since then, the Saudi energy giant has moved at pace and scale through subsequent expansion phases of the Jafurah unconventional gas development programme.

  Jafurah gas development phases

  As Aramco prepares to issue the main EPC tender for the Jafurah sixth expansion phase, it is also at an advanced bid evaluation stage for the programme’s fifth phase.

  MEED reported in August that China Petroleum Engineering & Construction Company (CPECC) had emerged as a frontrunner to win the main contract for the Jafurah fifth expansion phase, based on Aramco’s initial evaluation of proposals.

  The main scope of work for the fifth expansion phase also involves the EPC of three gas compression plants at the Jafurah gas basin, with each plant having a gas processing capacity of 200 million cf/d.

  Aramco had set 19 July as the final deadline for proposals, and contractors submitted their bids by that date, MEED previously reported.

  The Saudi energy giant is understood to have issued the main EPC tender for the project in the first quarter of this year.

  Aramco issued a solicitation of interest for the Jafurah fifth expansion phase in mid-November, with contractors submitting responses by 30 November, MEED previously reported.

  UK-headquartered Wood Group has carried out the front-end engineering and design for the project.

  ALSO READ: Aramco moves apace with Jafurah unconventional gas campaign

  Along with evaluating bids for EPC works on the fifth expansion phase project at Jafurah, Aramco has also recently kicked off EPC works on the fourth expansion phase.

  MEED reported in April that Aramco had selected Indian contractor Larsen & Toubro Energy Hydrocarbon (L&TEH) as the main contractor for the fourth phase, which sources estimate could be valued at about $1.5bn.

  The main scope of work on Jafurah’s fourth expansion phase involves the EPC of two gas compression trains at the gas basin. Each plant will process up to 200 million cf/d.

  Aramco has issued only a draft letter of award for the project to L&TEH; however, based on this, the contractor has started EPC works. The official contract award and final investment decision are pending, according to sources.

  EPC work on the third phase of the Jafurah unconventional gas development programme is also advancing.

  In July 2024, Aramco issued a non-binding letter of intent to a consortium of Tecnicas Reunidas and Sinopec Group for the EPC contract for phase three. The value of the contract is estimated at $2.24bn.

  The objective of the third expansion phase is similar to that of the fourth phase. The main scope of work involves the EPC of three gas compression plants, each with a capacity of 200 million cf/d.

  The third phase scope of work also includes building a 230kV substation to power the new gas compression plants, and installing other utility units, piping systems and safety equipment.

  The selection of contractors for the third expansion phase came within weeks of Aramco officially awarding EPC contracts for the second phase, which aims to raise the field’s processing potential to up to 2 billion cf/d of raw gas.

  Aramco awarded 16 contracts, worth a combined total of about $12.4bn, for the second expansion phase on 30 June 2024.

  The EPC scope of work on that project involves the construction of gas compression facilities and associated pipelines, and the expansion of the Jafurah gas plant, including the construction of gas processing trains, utilities, sulphur and export facilities, Aramco said in a statement.

  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 natural gas liquids (NGL) package 1 – NGL fractionation trains – $1bn: Tecnicas Reunidas / Refining & Chemical Engineering Group (part of China’s Sinopec Group)
  • Riyas NGL package 2 – utilities, storage and export facilities – $2.2bn: Tecnicas Reunidas/Refining & Chemical Engineering Group
  • Riyas NGL package 6 – site preparation works – $107m: Mofarreh Alharbi & Partners (Saudi Arabia)
  • Riyas NGL package 9 – temporary construction facilities – $80m: Mofarreh Alharbi & Partners

  Aramco kickstarted EPC works on the first phase of the programme in November 2021 by awarding $10bn-worth of subsurface and EPC contracts.

  The Jafurah programme is central to Aramco’s goal of increasing gas production capacity. The target has recently been raised to 80%, with 2021 as the baseline, up from 60%, to meet rising domestic and global demand. The company expects life-cycle investment in Jafurah to exceed $100bn.

  Aramco completed an $11bn lease-and-leaseback deal in late October 2025 for gas processing facilities at the Jafurah unconventional gas reserve with a consortium led by funds managed by Global Infrastructure Partners (GIP), part of US asset manager BlackRock.

  Under the transaction, a newly formed subsidiary, Jafurah Midstream Gas Company (JMGC), will lease development and usage rights to the Jafurah field gas processing plant and the Riyas natural gas liquids fractionation facility.

  After 20 years, JMGC will lease the assets back to Aramco. JMGC will collect a tariff payable by Aramco in exchange for granting Aramco the exclusive right to receive, process and treat raw gas from the Jafurah resource base.

  Aramco will hold a 51% majority stake in JMGC, while the GIP-led consortium will hold the remaining 49%. Investors participating in the GIP-led consortium include Hassana Investment Company, the Arab Energy Fund and Aberdeen Investcorp Infrastructure Partners, as well as other institutional investors from North and Southeast Asia and the Middle East.

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  Indrajit Sen
• 
  Delivery unlocks gigaproject investment

  29 September 2026

  

   

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  Completed infrastructure and open assets are making it easier to attract private developers and foreign investors to Saudi Arabia’s gigaprojects, said speakers at MEED’s Shaping Mega Projects conference in Riyadh on 28 September.

  Dale Chadwick, acting CEO of King Salman Park Foundation, said investor appetite had grown as construction advanced. The foundation has received 23 expressions of interest from private developers, and Chadwick said that number was increasing.

  “What the private sector is looking for in terms of investment is surety of what we’re doing,” he said. “As soon as a private developer comes in and sees what we’re doing, they’re blown away. The closer we get to completion, the greater the appetite.”

  He said interest from foreign direct investors was also rising, and that a deal the foundation expects to award soon involves foreign investment.

  The foundation times its private asset awards to follow infrastructure and landscaping works. “They don’t have to take the leap of faith that we are going to execute on our side of the equation,” said Chadwick. “They can see it.”

  Partnership model

  Mohamed Saad, president of DevCo at Diriyah Company, said investors wanted a relationship rather than a transaction.

  “The first thing they’re looking for is partners,” he said. "They’re looking for master developers who act as true partners to them.”

  Saad said master developers acted as the catalyst, investing in infrastructure and anchor assets before the private sector joins. He said investors also wanted healthy supply and demand, and a market able to absorb commercial assets in phases.

  He said Diriyah had prioritised delivery over publicity. “People want to see to believe,” said Saad. “We are delivering on the ground, and when people come and visit, they’re pleasantly surprised.”

  Chadwick said developers also wanted flexibility, with some seeking more height or a different mix of uses. “We ourselves have a plan, but in order to make that more attractive, we have to be prepared to make adjustments as well,” he said.

  Ben Edwards, group head of cost, commercial and procurement at Red Sea Global, said the operating track record of The Red Sea and Amaala was now its strongest pitch to investors.

  "We’ve gone past the field of dreams approach of ‘if you build it, they will come',” he said. "We’ve built it now. The tourists are coming.”

  Edwards said Red Sea Global was at various stages of negotiation on several joint venture opportunities for future projects.

  The developer’s utilities public-private partnership (PPP) at The Red Sea is fully operational. Its Amaala equivalent is in final testing and commissioning and is due to be operational before the end of the year. Edwards expects the model to spread.

  "I’m sure the PPP market will continue to expand into the different infrastructure sectors here, and then lead into other sectors, from schools to hospitals,” he said.

  He added that Red Sea Global’s environmental credentials were a selling point for investors.

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  Colin Foreman
• 
  KBR seeks renewable energy contracts in Libya

  29 September 2026

  

   

  The US-headquartered technology and engineering company KBR is seeking renewable energy project contracts in Libya.

  Representatives from KBR met with Abdussalam Elansari, chairman of the Renewable Energy Authority of Libya, earlier this month to discuss project opportunities, sources said.

  The meeting with Elansari followed KBR’s opening of a new branch in Libya and its securing of several contract awards in the oil and gas sector.

  In March, KBR announced that it had been awarded a contract by Zallaf Exploration, Production & Refining of Oil & Gas Company to provide project management and technical services for the South Refinery Project in Libya’s southern city of Ubari.

  Under the terms of the contract, KBR will provide contract management, project management and supporting technical services throughout the engineering, procurement and construction (EPC) phases of the project, according to a company statement.

  The EPC work is expected to be executed over a 50-month period.

  KBR is also carrying out work to re-evaluate the front-end engineering and design (feed) for the project to develop Libya’s J6 North Gialo field.

  In January, KBR signed a memorandum of understanding (MoU) with the state-owned Libyan Post, Telecommunications & Information Technology Company.

  Under the MoU, KBR agreed to support efforts to develop and improve Libya’s communications infrastructure and enhance fifth-generation (5G) mobile networks in the country.

  KBR has previously provided engineering services for major national projects in Libya, but was forced to shut down its office in the country several times amid political instability and security issues.

  When the company was known as Brown & Root, it worked on the Great Man-Made River Project in Libya, which is widely recognised as the largest irrigation project in the world.

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  Wil Crisp
• 
  Giga developers absorb supply chain shocks

  29 September 2026

  

   

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  Saudi Arabia’s gigaproject developers are rerouting shipments and absorbing higher freight costs as regional geopolitical tensions disrupt supply chains. Executives discussed the impact at MEED’s Shaping Mega Projects conference in Riyadh on 28 September.

  Mohamed Saad, president of DevCo at Diriyah Company, said supply chain disruption was one of several challenges facing the developer. He said it required the company to be adaptive and quick in its decision-making.

  He said the wider situation had also weighed on end-user demand. “The appetite to buy residential units or lease retail or commercial office spaces has softened,” he said. “We also see opportunity, and developers who believe in the future and invest and develop in these times will catch the opportunity.”

  Rerouted shipments

  Dale Chadwick, acting CEO of King Salman Park Foundation, said the park had been fortunate because much of its supply chain was already in place.

  Some bespoke construction materials sourced from India have been affected, forcing suppliers to change routes. The foundation has also been unable to import some trees from China, because extended delivery times meant they would spend too long at sea.

  “It is a genuine challenge, and it’s on a case-by-case basis,” said Chadwick. “We make the call, then we pivot and start trying to secure the material from elsewhere.”

  He said one alternative was sourcing from Europe through a different supply route into the kingdom’s west coast. Chadwick said the impact had so far been manageable, with no significant effect on the park linked to the geopolitical situation. He added that contractors were facing the same pressures and suggested some might be seeking higher margins as a result.

  Local content

  Ben Edwards, group head of cost, commercial and procurement at Red Sea Global, said the developer had been shielded by the stage its projects had reached. The high proportion of local content in its procurement had also helped.

  Red Sea Global set up a landscape nursery to bring plants in early and acclimatise them. Edwards said the nursery, the largest in the region, had doubled in size to about 200 hectares.

  Freight costs have still risen sharply. “Container prices have doubled, and you have to just face that,” he said. “Where you haven’t got any other route to bring things in, and you’ve got to pay double, and you need the stuff, then you have to be flexible and deal with it accordingly with the supply chain.”

  Edwards said the local supply chain had strengthened since the peak of gigaproject construction activity.

  “The capability was here in Saudi, but the capacity wasn’t necessarily here at the time that everybody needed it three or four years ago,” he said. “Everybody needed all the same stuff all at the same time.”

  He said support from the Ministry of Investment and government programmes to build supplier capability was starting to pay off. Supplier quality was improving as capacity grew.

  Saad said the contracting market was also maturing. A correction was allowing contractors to be more selective about the work they pursue.

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  Colin Foreman
• 
  Saudi developers pivot to operations

  29 September 2026

  

   

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  As Saudi Arabia’s largest real estate developers move from construction to operations, executives say the kingdom’s services sector must expand quickly to keep pace.

  Speaking at MEED’s Shaping Mega Projects conference in Riyadh on 28 September, Dale Chadwick, acting CEO of King Salman Park Foundation, said that finding enough people with the right skills to run newly completed assets was the next major hurdle.

  “The service side of the industry here has to ramp up so quickly,” he said. “The resource has to ramp up. Capability has to ramp up. These assets are huge, and to mobilise the number of people and the right skill set really is the next challenge.”

  King Salman Park has awarded 95% of the contracts for its first two phases and is now engaging operators. Chadwick said the foundation had agreed how its operations would be structured. He described the transition as “a challenge that we haven’t really traversed yet”.

  Red Sea Global is further along on its delivery journey. Ben Edwards, the developer’s group head of cost, commercial and procurement, said the developer was nearing completion of phase one of The Red Sea destination and would open more hotels on Shura Island before the end of the year. The airport, utilities and school are already operating, and a hospital opened last week.

  "We’re well into operations now,” said Edwards.

  He credited the construction management approach Red Sea Global adopted for its hotels. Under it, each project was procured as a separate package, giving the client greater control over the supply chain, quality, and health and safety.

  “There was a degree of scepticism across the market and within the kingdom about that delivery model,” he said. "We’ve actually proved our critics wrong. It’s worked really well for us, and we will continue to use that model going forward.”

  Live sites

  Diriyah is opening assets while about 74,000 workers remain on site each day. Mohamed Saad, president of Diriyah Company’s development arm DevCo, said the developer had awarded about SR130bn ($34.7bn) of contracts to date.

  The Ministry of Culture has moved into its new headquarters at the project. Diriyah is also preparing to hand over its first residential community, The Residences. Saad said the company had surrounded the community with landscaping and public realm so residents would not feel they were living on a construction site.

  “Planning ahead is extremely important,” he said. “We cannot expect that Diriyah will open in one day. All these assets will open gradually over the years.”

  Saad said the move into operations was creating significant opportunities for mechanical, electrical and plumbing (MEP) contractors, fit-out contractors and facility managers.

  “This is the next phase to come,” he said. “We are now in the middle of construction, but very soon more assets will come, and we need operators and facility managers.”

  Chadwick said the industry should also use prefabrication more widely. He pointed to the large number of hotel rooms the kingdom plans to deliver before it hosts the 2034 Fifa World Cup. “Modular panelisation and prefab is definitely the way to go,” he said.

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  Colin Foreman