Saudi Aramco Enters LoI with Spanish-Chinese JV for $2.2 Billion Gas Compression Project

Saudi Aramco, the world’s largest oil company, has announced a significant development with the signing of a non-binding letter of intent (LoI) involving a major industrial partnership. The agreement is with a joint venture that brings together Spain’s Técnicas Reunidas and China’s Sinopec, focusing on the potential expansion of gas compression infrastructure at Jafurah, the largest unconventional gas field in Saudi Arabia.

This letter of intent outlines the preliminary agreement for the potential construction of three gas compression plants within the Jafurah field, a strategic site known for its extensive reserves and significant role in Saudi Arabia’s energy strategy. The project, if it proceeds to full execution, is expected to require a substantial investment, with the total projected value estimated at approximately $2.24 billion. This figure underscores the scale and complexity of the proposed development.

The scope of the work detailed in the LoI includes the installation of a 230kV power connection at the gas plant substation area. This upgrade is crucial for supporting the operations of the new compression plants, ensuring they are powered efficiently and reliably. Additionally, the project will involve enhancements to the existing water pump system, which is vital for managing the operational needs of the gas processing facilities.

Técnicas Reunidas, a leading Spanish engineering and construction firm, holds a 60% stake in the joint venture, while Sinopec, one of China’s largest oil and gas companies, owns the remaining 40%. This partnership combines extensive international expertise in engineering and energy infrastructure, positioning the joint venture to effectively handle the complexities of such a large-scale project.

The anticipated duration for completing the project is nearly 44 months. During this period, the joint venture plans to employ over 400 chemical engineers. These professionals will be essential in overseeing the design, construction, and operational phases of the gas compression plants, ensuring that all technical and engineering challenges are addressed efficiently.

Aramco is one of the globe's largest integrated energy and chemicals companies, creating value across the entire hydrocarbon chain and delivering substantial social and economic benefits to communities worldwide that rely on its critical energy resources. The company is dedicated to taking a leading role in the energy transition.

China Petroleum and Chemical Corporation, commonly known as Sinopec, is a major Chinese oil and gas company headquartered in Beijing. It is publicly traded on both the Hong Kong and Shanghai stock exchanges. Sinopec Limited was formed as a joint-stock entity in February 2000.  Técnicas Reunidas is one of the world’s top engineering and construction firms, providing sustainable solutions.