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Geoeconomics, Saudi Arabia: Chinese company signed largest EPC contract for oil and gas

The main work of the project includes expansion of three booster stations of the Saudi gas pipeline network, as well as related ancillary facilities and expansion of the owner's permanent field

China Petroleum Engineering and Construction Corporation (CPECC) and Saudi Aramco have signed the EPC contract related to Saudi Arabia's Phase III National Gas Pipeline Network booster station expansion project, with a contract value of $1.699 billion (including taxes).

With the signing, CPECC was awarded the largest oil and gas EPC contract by a Chinese-funded company in the Saudi market.

The owner of the filling station project is the world-renowned Saudi Aramco National Oil Company, or Saudi Aramco for short. The project is of strategic importance as a top priority in the third phase of expansion of Saudi Arabia's national gas pipeline network. As a national strategic project to send gas from the east to the west, with a total investment of more than $12 billion and 17 tender sections.

CPECC committed to bid for the main project of 2 booster station packages.

China Petroleum Engineering & Construction Corporation (abbreviated to CPECC) is affiliated to China National Petroleum Corporation (CNPC) and is the largest professional company specialized in oil engineering, manufacturing, construction and lump-sum contracting in China.

The project is also the largest EPC general contracting signed by the Chinese company in the overseas market since the "14th Five-Year Plan" of BRI development wanted by Xi Jinping.

Market development

In December 2020, the Chinese Company presented the strategic plan to achieve large-scale international development.

To achieve this goal, the Company decided to optimize the market structure and layout and establish Iraq as the main market and Saudi Arabia as the next strategic market, forming a balanced "two-wing" development strategy.

On March 8, 2022, the management team of the Middle East Company held an expanded meeting to discuss and implement work in the Saudi Arabia market. The meeting established the idea of "actively promote, cautiously participate, seize opportunities, and break through as soon as possible" for the development of the Saudi Arabian market and comprehensively defined the selection strategy, work objectives, time plan, and people responsible for this project.

With the resumption of flights after the outbreak at the end of March 2024, the company's staff took up residence in the Dammam office for the first time, marking the official start of Saudi market development.

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