L&T bags Rs 24,000-cr order from Saudi Aramco, says report; shares surge over 3%

Engineering and construction major Larsen and Toubro (L&T) Ltd has bagged a mega Armaco order, a report said on Thursday. GlobalData-backed MEED, formerly Middle East Economic Digest, on September 7 reported that L&T has bagged two engineering, procurement, and construction (EPC) orders as part of Saudi Aramco's second expansion phase of its Jafurah unconventional gas production project.

The order from Saudi Aramco's Jafurah unconventional gas development project is nearly Rs 24,000 crore, reports said. The second contract is for constructing gas compression units and is worth $1 billion (Rs 83.2 billion).

According to the report, L&T will develop a gas processing plant and main process units for the project. Saudi Aramco has planned a $110 billion Jafurah gas project in the eastern province.

The company has classified projects worth Rs 1,000 to 2,500 crore as significant orders, while those in the range of Rs 2,500 to 5,000 crore as classified as “large”.

Aramco has issued letters of intent to the contractors, MEED reported, citing unnamed sources.

According to the report, the main five EPC packages and selected contractors are :

Package 1 – gas processing plant and main process units – $2.9 bn: Larsen & Toubro Energy Hydrocarbon (India)
Package 2 – utilities and offsites – $2.4 bn: Hyundai Engineering (South Korea)
Package 3 – gas compression units – $1 bn: Larsen & Toubro Energy Hydrocarbon
Riyas natural gas liquids (NGL) package 1 – NGL fractionation trains – $1bn: Tecnicas Reunidas (Spain)
Riyas NGL package 2 – utilities, storage and export facilities – $2.2bn: Tecnicas Reunidas.

Following the buzz, the shares of the conglomerate opened 1 per cent above than yesterday's closing price. At 11 am, the stock was trading at Rs 2,786.00, up by 2.03 per cent. Over the past three months, the stock has delivered a return of 18.38 per cent.

Barring this, the infrastructure major also submitted bids for another package of orders worth $10 billion for Saudi Aramco Safaniyah Gas Field recently.

In June, the conglomerate won a significant order from the National High Speed Rail Corporation for the Mumbai-Ahmedabad High Speed Bullet Train Project.

About Jafurah Gas Field

Situated in Saudi Arabia’s Eastern Province, the Jafurah Gas Field is the largest liquid-rich shale gas play in the Middle East. It containes an estimated 200 trillion standard cubic feet (scf) of natural gas. The Jafurah facility is expected to play a key role in the energy transition, helping Saudi Aramco make progress towards its net-zero ambitions.

The first development phase for the Jafurah gas plant is likely to come on stream by 2025. Aramco said it is progressing with the phased development of a project that will reach a raw gas processing capacity of 3.1 Bcf.

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