South Korean Hyundai Motor Company Secures a whopping contract of $2.4bn

Two subsidiaries of Hyundai Motor Company from South Korea have secured a contract worth $2.4bn. The contract, which was granted by Saudi Aramco, is for the construction of a gas processing plant at the Jafurah gas project located in the eastern province of Saudi Arabia. This announcement was made by the office of the South Korean president on Tuesday.

The beneficiaries of this contract are Hyundai Engineering and Construction and Hyundai Engineering. The awarding of this contract marks the 50th anniversary of the construction collaboration between Saudi Arabia and South Korea. This memorable event coincided with the visit of the South Korean President, Yoon Suk Yeol, to Saudi Arabia.

Jafurah stands as the kingdom's most extensive non-associated gas field, with its development commencing in late 2021. Spanning an area of about 17,000km² to the east of Saudi Arabia's prominent 4mn b/d Ghawar oil field, the field holds a massive 200 trillion ft³ of liquid-rich gas, as reported by Aramco.

Aramco has also projected that production will surge from 200mn ft³/d in 2025, eventually hitting around 2bn ft³/d by the decade's close. This production will include 420mn ft³/d of ethane and approximately 630,000 b/d of gas liquids and condensates, which are vital for the burgeoning petrochemical sector in Saudi Arabia.

Aramco has estimated that the Jafurah project will witness a capital expenditure of about $68bn in its initial decade of development. This expenditure is set to elevate to a staggering $100bn throughout the project's duration. As Saudi Arabia aims for net zero greenhouse gas emissions by 2060, Jafurah is anticipated to play a significant role in achieving this by aiding the kingdom's objective of sourcing half its electricity from gas and the remaining from renewables.

This recent contract follows another massive $5bn award by Aramco to Hyundai Engineering and Construction in June. This prior award centered on the design and development of a steam cracker at the Amiral complex.

In another development, Aramco has entered into an agreement with KNOC, the state oil firm of South Korea. This deal pertains to the storage of 5.3mn bl of crude at KNOC's Ulsan facility. KNOC aims to have these volumes on standby to address potential energy crises. A similar agreement was struck by KNOC with Abu Dhabi's Adnoc earlier in January.

According to the article by Procurement Resource, two Hyundai Motor Company subsidiaries in South Korea have won a $2.4 billion contract from Saudi Aramco to construct a gas processing plant at Saudi Arabia's Jafurah gas project. This deal coincides with the 50th anniversary of Saudi Arabia-South Korea construction collaboration and follows a $5 billion award to Hyundai Engineering and Construction in June for a steam cracker project at the Amiral complex. The Jafurah gas field, one of the largest non-associated gas fields in Saudi Arabia, is expected to play a significant role in Saudi Arabia's goal of achieving net-zero greenhouse gas emissions by 2060.