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Saudi Aramco has sealed a deal with South Korean Hyundai Engineering & Construction and Hyundai Engineering for the construction of a $2.4-billion gas processing plant.
The investment will be focused on the second phase of the facility. The two South Korean companies are already working on the first phase after they won the contract for that in 2021.
The plant will be built at the Jafurah field, which, according to Reuters, is Saudi Arabia’s largest non-oil associated gas field. Its reserves are estimated at some 200 trillion cubic feet.
Saudi Arabia has recently been working on expanding its natural gas production to diversify its energy revenue sources away from the exclusivity of crude oil.
Last month, the Saudi state energy major bought a stake in MidOcean Energy, a liquefied natural gas company, property of EIG Partners. It also has an option to boost that stake.
"This is an important step in Aramco's strategy to become a leading global LNG player," the Saudi company’s head of upstream said at the time.
Now, Aramco is looking for more acquisition opportunities in LNG, Reuters reported earlier this month.
Meanwhile, it is expanding local gas production as well. The company says it increased its daily gas processing capacity from 2 billion cu ft daily to 18 billion cu ft between 2000 and 2022 and has plans to boost this further.
At the meeting where the $2.4-billion deal for the Jafurah facility was signed, Riyadh also inked another deal with a South Korean company, this time for oil.
Under the deal, Aramco could store 5.3 million barrels of crude at a storage facility operated by Korea’s state-owned KNOC.
Both deals were signed during a visit by South Korea’s president to Riyadh to expand bilateral business dealings. Saudi Arabia is the biggest supplier of oil to South Korea.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com