Saudi Petrochemical and EPC Report — 2026-06-11

1. Project Updates

Saipem Wins Saudi Uthmaniyah Gas Compression EPC Saipem has secured an EPC contract to build a new compression system for the Uthmaniyah gas compression plant in Saudi Arabia, part of the Saudi government’s strategy to expand its gas sector.

Doosan Enerbility Wins 840 Billion KRW Saudi Power Plant Deal Korean energy company Doosan Enerbility has further strengthened its position in the Middle East by winning a contract to build a combined heat and power plant in Saudi Arabia, valued at approximately 840 billion KRW.

Note: Details regarding project-stage bidding, RFPs, and preferred bidder status are not covered in this report.

1 sources

energydaily.co.kr

“두산에너빌리티, 열병합발전소 시장서 입지 넓히고 있다” < 산업.기기 < 기사본문 - 에너지데일리

2. Korean Participation and Financial Support

Vision 2030 and Korean Corporate Opportunities As Saudi Arabia pushes to boost non-oil sectors and manufacturing infrastructure under Vision 2030, a policy effective since 2024 mandates that companies without a Regional Headquarters (RHQ) in Saudi Arabia cannot participate in government-led projects.

Large-scale Collaborative Projects Following high-level visits, major Korean construction firms are actively pursuing various large-scale, multi-trillion KRW projects in collaboration with the Saudi government and local entities.

2026 SME Policy Loan Support The government has announced its 2026 SME policy loan plans, alongside support programs from the Ministry of SMEs and Startups, which can be utilized by companies participating in overseas construction projects.

3. Early Risk Detection (Contract/Financial/Political)

Neom City Cancellations and Funding Shortages Saudi Arabia has canceled a 2.5 trillion KRW high-speed rail project under the Neom City umbrella, with further project cancellations occurring due to funding issues. According to U.S. media, the cost of losses from Neom City contract cancellations is estimated to reach approximately 25 trillion KRW.

Payment Freezes for Consultancies and Law Firms The Saudi government has frozen payments to some global consulting and law firms. While some firms continue to work despite payment uncertainties, others have reportedly been instructed to complete short-term tasks before halting new projects, serving as a critical signal regarding potential payment collection risks.

Project Delays for Korean Firms The Neom City "Running Tunnel" project, awarded to a consortium led by Samsung C&T and Hyundai E&C in 2022, has been delayed at the client’s request. Due to the war-related impact, it is difficult to predict when work will resume, and determining liability for cost increases or managing PF maturity pressures remains a major challenge.

1 sources

theguru.co.kr

美 매체 “사우디, 네옴 취소로 25조 손실 직면”

4. Competitive Landscape and Strategy

Saipem’s Expansion in Saudi Arabia By securing the Uthmaniyah EPC contract, Saipem continues to expand its influence in the Middle East energy sector as global EPC firms continue to target Saudi projects.

Strengths and Weaknesses for Korean Firms

• Strengths: As shown by Doosan Enerbility’s recent success, Korean firms can compete effectively in the Saudi market using their technical expertise and construction experience. Economic cooperation between the two countries remains strong.
• Weaknesses: Increasing political and financial risks due to government payment freezes and Neom City project cancellations. Intensifying competition with global EPC giants like Saipem and Bechtel. Proactive risk assessment for payment collection is necessary before signing new contracts.

Key Takeaway: While the Saudi petrochemical and plant market offers opportunities, the risks associated with Neom City cancellations and payment freezes are significant. Korean firms are advised to verify risk mitigation measures, such as Advance Payment Bonds and government guarantees, when considering new projects.