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Frontrunner emerges for Master Gas System package

6 August 2024

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Netherlands-headquartered A Hak has emerged as the frontrunner to win the contract for package 9 of Saudi Aramco’s third expansion phase of the Master Gas System network (MGS-3) in Saudi Arabia.

MEED recently reported that A Hak submitted the lowest bid for MGS-3 package 9, followed by Turkish firm Mapa Group. A consortium of Germany’s Max Streicher and locally-based National Basics Company was said to have offered the third-lowest bid.

“Aramco is close to awarding package 9 to A Hak,” one source said. “Negotiations between Aramco and the other bidders are understood to have completed now.”

Contractors submitted revised commercial bids for the package by the deadline of 26 May, MEED previously reported.

The original scope of work on package 9 mainly involves engineering, procurement and construction (EPC) of a 56-inch pipeline covering 458 kilometres from booster gas compression station 10 to sector 1 STS-2.

The estimated $10bn MGS-3 project consists of 17 EPC packages. The first two packages involve upgrading existing gas compression systems and installing new gas compressors. The 15 other packages relate to laying gas transport pipelines at various locations in the kingdom.

Aramco received technical bids for the 15 pipeline packages of the MGS-3 project, including package 9, during the third and fourth weeks of August last year. Contractors submitted commercial bids for the pipeline packages during the last two weeks of September, MEED reported.

While Aramco selected contractors for 14 EPC packages of the MGS-3 project in February this year, prices submitted by bidders for package 9 are understood to have “exceeded Aramco’s budget”, sources previously said.

This is understood to be the main reason Aramco sought revised commercial proposals for the package, adding that the scope of work on the package has also been modified.

MGS-3 EPC packages

On 30 June, Aramco officially awarded 15 lump-sum turnkey contracts for the MGS-3 project, worth $8.8bn.

The expansion, being conducted in collaboration with the Saudi energy ministry, will increase the size of the network and raise its total capacity by an additional 3.15 billion standard cubic feet a day (cf/d) by 2028, through the installation of about 4,000km of pipelines and 17 new gas compression trains, Aramco said in a statement.

Aramco selected the following contractors for 15 of the 17 EPC packages of the estimated $10bn MGS-3 project, MEED reported in February:

  • Package 1 – China Petroleum Engineering & Construction Company (China)
  • Package 2 – Sepco (China)
  • Packages 3 and 12 – Gas Arabian (Saudi Arabia)
  • Package 4 – Mapa (Turkiye)
  • Package 5 – Bin Quraya (Saudi Arabia)
  • Packages 6 and 7 – Sinopec Petroleum Services (China)
  • Package 8 – Larsen & Toubro Energy Hydrocarbon (India)
  • Packages 10 and 14 – Nesma & Partners (Saudi Arabia) / Sicim (Italy)
  • Package 11 – Max Streicher (Germany) / National Basics Company (Saudi Arabia)
  • Packages 13, 15 and 17 – Kalpataru Projects International (India)

Meanwhile, package 16, originally part of the tendering process for the MGS-3 project, has been carved out as a separate tender by Aramco. Contractors submitted proposals for this package by the deadline of 28 July.

The original Master Gas System (MGS) was built in the 1970s and commissioned in 1982. Since then, Aramco has been supplying natural gas to its customers across Saudi Arabia via the network, mainly channelling associated gas from Ghawar and other oil fields.

Over the past decade, amid rising gas demand from Saudi Arabia’s industrial and household sectors, Aramco has undertaken projects to increase its non-associated gas production. In 2015, it launched the second expansion phase of the MGS (MGS-2).

Local contractor Arkad Engineering & Construction won the three main pipeline packages of MGS-2, worth an estimated $1.3bn, in early 2016.

EPC works were completed in 2021, increasing the MGS network’s gas handling and transport capacity from 8.4 billion cf/d to 12.5 billion cf/d.

ALSO READ: Aramco tenders Jafurah fourth expansion phase

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Indrajit Sen

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    None of the Maghreb countries seem to understand this better than Morocco, which has been rolling out what might be described as a GCC-style vision for the country. Most recently, in September 2024, it launched the Digital Morocco 2030 strategy to use artificial intelligence to improve access to services in rural and underserved areas.

    Such initiatives are central to Morocco’s broader New Development Model (NDM) strategy, first laid out in 2021 and recognised by bodies such as the Washington-based IMF as a key driver of economic transformation in the country. Key indicators for the NDM include doubling the country’s GDP per capita to $16,000 by 2035, doubling the rate of women in the workforce, raising renewables to 40% of total energy consumption and developing the digital sector to account for 5% of GDP.

    Rabat is also widening the country’s social security net, having expanded family allowances in 2023, and with plans to expand old-age pensions and unemployment benefits in 2025. The government is also improving access to services for Amazigh speakers in answer to loud political calls since the 2016-17 Amazigh-led Hirak Rif movement protests.

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    Externally, Morocco has meanwhile intensified its diplomatic campaign for international recognition of its semi-autonomy plan for Western Sahara. First proposed in 2007, the scheme initially received little traction, but the situation changed significantly in 2020 with then US President Donald Trump’s recognition of Moroccan sovereignty over the territory as part of a deal to normalise ties with Israel. In 2022, Spain also shifted its stance to one of support for Rabat’s autonomy plan, followed by France in early 2024 and by the UK in June 2025 – each country for their own reasons.

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    In a mirror image of Morocco’s diplomatic journey, Algiers has worsening foreign relations with Paris and Madrid due to its staunch opposition to the Western recognition of Moroccan claims to the Western Sahara region.

    In May 2025, Algeria expelled 15 French diplomatic agents, citing their “irregular positions” on the geopolitical issue. The incident matched similarly negative responses by Algeria to Spain in 2022.

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    Borouge Group International

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    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14249219/main.jpg
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    The contract award follows Arada’s signing of a AED604m ($164m) deal in March to construct the first phase of the Arada Central Business District project in Aljada, Sharjah.

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    Arada is the developer behind three masterplanned residential communities in Sharjah. The Aljada, Masaar and Nasma Residences communities are together valued at AED33bn. In Dubai, Arada is developing the Jouri Hills project.

    Covering 24 million square feet in the Muwaileh district, the masterplan for Aljada includes residential districts, as well as retail, hospitality, entertainment, sporting, educational and healthcare components, and a business park.

    The UAE’s heightened real estate activity is in line with UK data analyst GlobalData’s forecast that the construction industry in the country will register annual growth of 3.9% in 2025-27, supported by investments in infrastructure, renewable energy, oil and gas, housing, industrial and tourism projects. 

    The residential construction sector is expected to record an annual average growth rate of 2.7% in 2025-28, supported by private investments in the residential housing sector, along with government initiatives to meet rising housing demand.

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