이 기사는 2021년 12월 08일 08시06분 thebell에 표출된 기사입니다

South Korea's Samsung Engineering and Hyundai Engineering will join Saudi Arabia’s first-ever shale gas development project.

Samsung Engineering and the Saudi Arabia's Aramco held a contract signing ceremony for Jafurah Gas Plant Project Package 1 worth 1.45 trillion won ($1.23 billion), equivalent to 2.93% of the South Korean company's recent revenue.

“Aramco has selected vendors for EPC (engineering, procurement and construction) packages worth total $5 billion, including Samsung Engineering,” said an industry source.

Samsung Engineering will construct gas processing facilities with two trains, each handling about 550 MMcfd of raw gas by 2025, processing up to 1.1 billion cubic feet per day of unconventional raw gas from nearby areas. Samsung Engineering and Aramco have signed total 16 projects worth 14 trillion won so far.

A joint venture between Hyundai Engineering and Hyundai Engineering & Construction (Hyundai E&C) also won a 2 trillion won second package from Aramco to build utilities and sulfur-recovery facilities. Hyundai Engineering and Hyundai E&C hold 55% and 45% stakes in the JV, respectively.

The Jafurah project is meaningful in that it is a shale gas development in the Middle East where the entry barrier is high compared to the U.S.

Saudi Arabia is stepping up efforts to develop shale gas in a bid to enhance its crude oil export capacity and expand gas exports amid an oil price war with the U.S.

Jafurah is located between Ghawar, the world’s largest conventional onshore oilfield, and the Persian Gulf coast.

With the latest order, Samsung Engineering will likely achieve its annual target. The company set its order target at 6 trillion won at the beginning of this year, but won orders worth a mere 4.4 trillion won as of the end of the third quarter.

Its annual order target, which has been lowered since the outbreak of the Covid-19 pandemic, could also be raised. The company lowered its annual order target from 6.6 trillion won in 2019 and 10.5 trillion won in 2020 to 6 trillion won in 2021.

Samsung Engineering may win additional orders from Aramco on the back of its positive relationships with the Saudi’s state-run oil giant. The Korean company secured a 740 billion won deal to construct a large-sized plant in the Middle East country in April and joined Aramco’s mid- to long-term project National Marketing Establishment Company (NAMAT) as an EPC partner.

The Saudi government last year approved development of the giant Jafurah unconventional field, with overall investments set to reach over $100 billion. (Reporting by Jun-hyeok Shin)