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Contractors extend bid validity for Jafurah fourth expansion phase

6 January 2026

 

Contractors have extended the validity of their bids submitted to Saudi Aramco for engineering, procurement and construction (EPC) works on the fourth expansion phase of the Jafurah unconventional gas development in Saudi Arabia until the end of February this year.

The main scope of work on the Jafurah fourth expansion phase project involves the EPC of three gas compression plants at the giant gas basin in the kingdom’s Eastern Province. Each plant will be able to process up to 200 million cubic feet a day (cf/d).

Contractors submitted proposals for the Jafurah fourth expansion phase project by the deadline of 15 January last year, MEED previously reported. Following the submission of bids, Aramco initially requested contractors to extend the validity of their bids until the end of September as it needed more time to evaluate those proposals, it was earlier reported.

The Saudi energy giant then asked contractors to extend the validity of their base proposals until February, with the bidders complying with that request, according to sources.

Along with requesting bidders for a bid validity extension for a second time, Aramco also sought an alternate set of commercial proposals from contractors, as per sources. Bidders submitted the second price option to the client in December, they added.

According to sources, the following contractors are among those that are understood to have submitted bids for the project:

  • Larsen & Toubro Energy Hydrocarbon (India) / China Petroleum Engineering and Construction
  • Samsung E&A (South Korea)
  • Tecnicas Reunidas (Spain) / Sinopec Group (China)

Aramco issued the main tender for the estimated $2bn-$2.5bn contract in July 2024, MEED previously reported.

Contractors invited to bid for the contract were initially set a deadline of 15 October that year for submission of technical bids and their In-Kingdom Total Value Add (IKTVA) credentials. Commercial bids were due to be submitted by 31 October, with the deadline extended until 31 December, and then until 15 January, 2025.

The detailed scope of work on the Jafurah fourth expansion phase involves the EPC of the following process and utilities units at the south field of the Jafurah reserve:

  • Three gas compression trains of 200 million cf/d capacity each, measuring 400 by 400 metres
  • Gas compression plant inlet area
  • Gas compression plant condensate and produced-water handling
  • Instrumentation and plant air unit
  • Nitrogen generation unit
  • Raw/potable/water utilities
  • Chemical injection systems
  • Diesel systems
  • Flare and flare gas recovery systems
  • Gas compression plant burn pit
  • Closed drain system
  • Oily water system
  • Sanitary water system
  • Stormwater system
  • Firewater system
  • Fire and gas protection system
  • All buildings located within the gas compression plant, excluding security buildings
  • Outside battery limit buildings

The bid evaluation process for the Jafurah fourth expansion phase project is taking place as Aramco prepares to issue the main tender for EPC works on the fifth expansion phase of the mammoth Jafurah unconventional gas development programme.

Aramco completed the solicitation of interest process with contractors for the main EPC tendering round for the Jafurah fifth expansion phase project in November, MEED recently reported.

UK-headquartered Wood Group has carried out the front-end engineering and design (feed) on the fifth expansion phase.

Jafurah gas development phases

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

Aramco, in early December, 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 Saudi oil behemoth had earlier 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 its unconventional gas programme at peak production is expected to generate electricity equivalent to displacing 500,000 b/d of oil.

Progress on the fourth and fifth expansion phases of the Jafurah unconventional gas development programme continues, as EPC work on the third phase advances.

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 the Jafurah third expansion phase. The value of the contract is estimated to be $2.24bn.

The objective of the third expansion phase of Jafurah is similar to that of the fourth phase of development. 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’s scope of work also includes building a 230kV substation to power the new gas compression plants and installing other utilities units, piping systems and safety equipment.

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

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 the 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.

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.

The Jafurah unconventional gas development 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.

Prior to the commissioning of the Jafurah gas plant in the last quarter of this year, Aramco completed an $11bn lease-and-leaseback deal in late October 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, which Aramco started in August, 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 (NGL) 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 (TAEF) and Aberdeen Investcorp Infrastructure Partners, as well as other institutional investors from North and Southeast Asia and the Middle East.

https://image.digitalinsightresearch.in/uploads/NewsArticle/15372909/main3958.jpg
Indrajit Sen

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