L&T arm wins $4 billion gas projects from Aramco: report

Saudi Aramco has awarded contracts to the tune of $4 billion, part of an overall $25 billion gas development and expansion project, to a subsidiary of Indian engineering, procurement and construction (EPC) giant Larsen and Toubro Ltd (L&T), MEED-Middle East Business Intelligence reported.

The contracts pertain to the phase-II development of Saudi Aramco’s vast Jafurah unconventional gas field in the eastern province of Saudi Arabia, phase-III expansion of Aramco’s master gas system, new gas rigs and ongoing capacity maintenance.

L&T’s arm, Larsen and Toubro Energy Hydrocarbon, won a $2.9 billion contract to develop a gas processing plant and main process units, and a $1 billion contract for developing gas compression units as part of phase-II of the Jafurah project, MEED reported.

L&T clarified in a note to the exchanges on Tuesday, 2 July, that it had notified the exchanges on 11 October and 31 October last year on the winning of the onshore projects.

A spokesperson for Saudi Aramco declined comment.

The phase-II development of Jafurah field will involve the construction of gas compression facilities and associated pipelines; expansion of the Jafurah gas plant, including construction of gas processing trains, and utilities, sulfur, and export facilities.

Shares of L&T rose 2.3% to ₹3,609.70 at 2pm in intraday trading on Tuesday.

In October, L&T had announced that its subsidiary had won a contract for the main gas compression system for phase-II of Jafurah from Aramco.

The Middle East energy giant awarded the contracts during a ceremony on 30 June at its headquarters in Dhahran.

Located in Saudi Arabia’s eastern province, the Jafurah basin hosts the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cu. ft of gas in place. This shale play covers an area of 17,000 sq. km.

Phase-I of the Jafurah development program began in November 2021, and is progressing on schedule with initial start-up anticipated in the third quarter of 2025, Aramco said.

Aramco’s master gas system is an extensive network of pipelines that connects Aramco’s key gas production and processing sites throughout the Kingdom of Saudi Arabia.

Its expansion will increase access to domestic gas supplies for customers in the industrial, utility and other sectors—providing a lower gas emission alternative to oil for power generation, the company said.