In a significant win for South Korean companies, Samsung E&A Co. and GS Engineering & Construction Corp. (GS E&C) have secured a combined US$7.2 billion contract to expand a gas plant in Saudi Arabia. This marks the largest order for South Korean firms in the Middle Eastern country and is a testament to the growing cooperation between the two nations in the construction and infrastructure sectors.
The Fadhili Gas Increment Program, overseen by Saudi Aramco, aims to increase the capacity of an existing gas plant located near Jubail in eastern Saudi Arabia. The deal, which was finalized during President Yoon Suk Yeol’s state visit to Saudi Arabia last October, is a reflection of the strong bilateral ties between the two countries.
Samsung E&A has bagged a $6 billion contract to construct two gas treatment facilities as part of the plant expansion program, the largest-ever deal secured by South Korean builders in Saudi Arabia. Once completed, the project will raise the plant’s daily capacity to 38 million MMSCFD from the current 25 million MMSCFD, contributing to Saudi Arabia’s efforts to boost gas production.
GS E&C, on the other hand, has won a $1.22 billion contract to build a sulfur recovery unit at the plant, which is expected to take about 41 months to complete. This mega deal comes as a welcome relief for South Korean construction companies grappling with a sluggish domestic market, offering hope for more lucrative opportunities in the Middle East.
The latest contract is the third-largest overseas construction order secured by a South Korean firm, following the Barakah nuclear power plant project in the UAE and the Bismayah New City project in Iraq. With Middle Eastern countries expected to invest more in construction projects due to rising oil prices, South Korea is poised to achieve its 2024 target of $40 billion in overseas construction orders.
Shares of Samsung E&A and GS E&C surged following the announcement of the deal, reflecting investor optimism about the companies’ future prospects. As South Korean builders continue to capitalize on the construction boom in the Middle East, they are well-positioned to further strengthen their presence in the region’s lucrative market.
(Source: MSN | Pulse News Korea | KED Global)
