Saudi Petrochemical and EPC Project Report — 2026-06-01

1. Updates on Project Wins

1) Doosan Enerbility – Jafurah Cogeneration Plant Phase 2 Contract

• Contract Value: 840 billion won
• Client: KEPCO (Korea Electric Power Corporation) · Saudi Aramco Consortium
• Project: Jafurah Cogeneration Plant Phase 2 Construction
• Status: Contract signed (2026-06-01)
• Significance: Signals expanded entry of major Korean construction firms into Saudi energy infrastructure.

2) Saudi EPC Firm – Mutlaq Al-Ghowairi Contracting (MGC) IPO

• Company: Mutlaq Al-Ghowairi Contracting Company (MGC)
• IPO Size: $795 million (approx. 104 billion won)
• Valuation: $2.7 billion
• Exchange: Saudi Stock Exchange
• Expected Listing Date: June 2026
• Background: Established in 1977, a leading commercial EPC & O&M firm in Saudi Arabia.

3) International LNG Project – Cheniere EPC Contract (Note: Located in Texas, separate from Saudi projects)

• Cheniere Partners and Bechtel signed an EPC contract for the Sabine Pass expansion (provided here as an international industry benchmark).

1 sources

investing.com

Cheniere Partners signs EPC contract for LNG expansion phase By Investing.com

2. Korean Participation and Financial Support

1) Jafurah Cogeneration Plant Phase 2 – KEPCO/Aramco Consortium

• Doosan Enerbility has finalized its contract.
• This project, led by KEPCO, serves as a model for Korean construction and energy firms entering the Saudi market.
• Financial Support: Likely involves EDCF (Economic Development Cooperation Fund) from the Export-Import Bank of Korea, though this requires further confirmation.

2) Saudi Vision 2030 Policy Support

• Global firms without a Regional Headquarters (RHQ) in Saudi Arabia are ineligible for government-led projects as of 2024.
• Korean companies must secure local partners for Saudi project bids.

3) SME Financial Support

• The 2026 government policy loan program for SMEs is active.
• Financial support can be utilized for overseas infrastructure projects, subject to specific project evaluations.

3. Risk Monitoring (Contractual/Financial/Political)

1) Uncertainty in Payment Settlements

• There are growing concerns regarding frozen payments to global consulting firms and law firms by the Saudi government and major clients.
• While some firms continue working despite payment uncertainties, others have received instructions to halt new projects.
• Impact: It is crucial to negotiate higher advance payment ratios or structured milestone-based payments.

2) Persistent Project Delay Risks

• The impact of regional conflicts makes it difficult to predict when stalled projects might resume.
• Dispute resolution remains difficult regarding issues like construction cost increases and PF (Project Financing) maturity pressure.

3) NEOM Project Delays

• Rising instances of project delays or cancellations by the Saudi government suggest that new projects may face similar risks.
• Chronic risks exist where Middle Eastern business ventures can be downsized or canceled at any time.

4. Competitor Trends and Strategies

1) Strengths of Korean Firms

• The Doosan Enerbility win confirms Saudi trust in Korean builders.
• A value chain is forming where Korean firms can participate as technology and materials suppliers in projects led by KEPCO.
• Consolidation of the energy cooperation framework between Saudi Arabia and Korea.

2) Competitive Landscape

• Saudi local EPC firms (like MGC) are strengthening their capital through IPOs, heightening international competition.
• Global EPC firms (like Bechtel) are accelerating their capture of LNG and energy projects.

3) Strategy for Korean Companies

• Localization: Establishing an RHQ or partnering with local entities is mandatory to meet government bidding requirements.
• Contract Risk Management: Focus on higher advance payment ratios, monthly progress payment systems, and securing collateral for payments.
• Diversify Portfolios: Move toward multi-layered participation (e.g., technical consulting, material supply) rather than relying solely on large-scale, single-point projects.

Daily Risk Alert: Signs of payment freezes persist – ensure strict contract terms for upfront payment security on new wins.