South Korea’s Hyundai Engineering & Construction said Wednesday that it had obtained a whopping 3.2 trillion won ($2.7 billion) deal to expand the production capacity of an offshore oil field owned by Saudi Arabia’s state-run oil company Saudi Aramco.
The contract encompasses two oil development projects, Package 6 and Package 12, to be undertaken at the Marjan offshore oil field in northeastern Saudi Arabia. For Package 6, the company will expand the production capacity of an existing refinery, and Package 12 will entail construction of a new utility plant, Hyundai E&C said.
A signing ceremony was held Tuesday at the Saudi Aramco headquarters in Dhahran, with Hyundai E&C Executive Vice President Lee Won-woo and Saudi Aramco President Amin H. Nassar in attendance as well as representatives of affiliates of both companies.
Hyundai E&C Executive Vice President Lee Won-woo (fifth from right), Saudi Aramco Senior Vice President Ahmad A. Al-Sa’adi (fourth from right) and executives from both companies attend the signing ceremony. (Hyundai E&C)
Hyundai E&C was selected as the final bidder after fierce competition with world-leading rivals. The company was recognized for its excellent technical skills and construction capabilities, it said.
According to Hyundai E&C, Package 6 will bring in some 1.7 trillion won and construction will last 41 months. Once it is completed, the refinery will have the capacity to produce an additional 300,000 barrels of crude oil per day.
Package 12 will take the same amount of time to complete and will bring in some 1.5 trillion won. The new facility will supply utilities, such as electricity and water, to an onshore plant that processes 2,500 million standard cubic feet of gas per day.
This is not the first construction deal Hyundai E&C has made with the oil company.
Previously, Hyundai E&C helped Saudi Aramco build a processing facility in Khurais for $700 million and another in Karan for $1.4 billion. Those projects were completed in 2009 and 2012.
Currently it is carrying out six construction projects there, including an ethane collection and treatment plant in Uthmaniyah worth $1.4 billion that is slated for completion in November.
“Hyundai E&C won the deal based on the trust it built (with Saudi Aramco) through the construction of the Uthmaniyah ethane processing plant,” a Hyundai E&C official said.
Hyundai E&C first set foot in Saudi Arabia in 1975 upon striking a construction deal for an industrial port in Jubail, on the coast of the Persian Gulf. It has since made its presence known in the kingdom, facilitating over 156 construction projects worth some $17 billion.
By Cho Hyee-su (
chohyeesu@heraldcorp.com)