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Frontrunner emerges for Jafurah fifth expansion phase

19 August 2026

 

A frontrunner appears to have emerged to win the main contract from Saudi Aramco for a project representing the fifth expansion phase of the Jafurah unconventional gas development programme in Saudi Arabia.

The main scope of work on the fifth 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 set 19 July as the final deadline for proposals, and contractors submitted their bids by that date, MEED previously reported.

Following Aramco's initial evaluation of the proposals, China Petroleum Engineering & Construction Company (CPECC) is understood to be in a favourable position to secure the main EPC contract for the project, according to sources.

“It is still early days, and Aramco is still in discussions with the other bidders for Jafurah 5,” one source said.

“CPECC is leading the race, based upon initial evaluation [by Aramco], but the situation remains subject to change as negotiations [between the client and bidders] continue,” another sources told MEED.

ALSO READ: Aramco moves apace with Jafurah unconventional gas campaign

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.

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.

Aramco recently 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.

Jafurah gas development phases

Along with evaluating bids for EPC works on the fifth expansion phase project at Jafurah, Aramco 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 be able to process up to 200 million cf/d.

Aramco has only issued a draft letter of award for the project to L&TEH, however, based on which 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 to be $2.24bn.

The objective of the third expansion phase 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 development 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.

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 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.

READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

> MARKET FOCUS: Maghreb fortunes diverge
To see previous issues of MEED Business Review, please click here
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Indrajit Sen

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