On January 27, 2026, the global energy industry's attention shifted to Riyadh, Saudi Arabia. Saudi Aramco completed two closely related events on this day: firstly, successfully issuing a $4 billion bond to raise key funds for its "Main Gas System Phase III Expansion Project" with a total investment of $8.8 billion; The second is to officially push the EPC contract for the most core and technically complex sub project of MGS3 Phase III - Shedgum Natural Gas Compression Plant Expansion Project into the final evaluation stage. In this fierce competition that brings together top engineering giants from around the world such as Italy, Spain, India, South Korea, and China, the Sinopec consortium and China Petroleum Engineering Construction Corporation have become one of the most promising competitors to win this strategic project, thanks to their deep project foundation and excellent localization capabilities in the Middle East.

Core project, cornerstone of Saudi Arabia's energy transformation

MGS3 Phase III is a cornerstone project for Saudi Arabia to achieve its "2030 Vision" energy transformation strategy. The entire project plans to lay over 4153 kilometers of natural gas pipelines, install 17 new compressor units, and is expected to add up to 3.2 billion cubic feet of natural gas processing capacity per day after full operation, a 60% to 80% increase from Saudi Arabia's national natural gas processing capacity in 2021. Among them, the Shedgum compression plant expansion project, which is currently in the final evaluation stage, is the "heart" node of the entire system. It will build three new compression plants using advanced intelligent control systems, in collaboration with the adjacent Uthmaniyah plant, with a total daily processing capacity exceeding 1.5 billion cubic feet. This not only provides stable and clean energy security for Saudi Arabia's large-scale "oil to gas" power generation plan and industrial development, but also serves as the raw material foundation for Saudi Arabia's future layout of low-carbon industries such as blue hydrogen, and is a key lever to leverage its entire energy structure to transform towards low-carbon diversification.

Chinese enterprises compete, relying on strength and deep cultivation

In this global bidding, the performance of Chinese companies is particularly outstanding. China Petroleum Engineering Construction Corporation has become a veteran in Saudi Arabia's natural gas infrastructure field, successfully delivering the MGS3 booster station expansion project with a contract amount of up to 1.699 billion US dollars. It has a deep understanding and mature implementation experience of Saudi Aramco's strict technical, safety, and environmental standards. The other bidding party, a consortium consisting of multiple engineering companies under Sinopec, has partnered with the well-known Spanish engineering company Tecnica Reunidas to form a strong alliance. They just won the $3.3 billion gas compression project for Saudi Aramco's Jafurah unconventional gas field in 2025, accumulating unique advantages in cutting-edge technology applications such as modular construction. More noteworthy is that Chinese companies are not newcomers, they have already been important builders in the MGS3 Phase III project. For example, the 6th and 7th pipeline projects undertaken by a subsidiary of Sinopec have started construction in September 2024 and are currently progressing smoothly. The first pass welding qualification rate has exceeded 97.9%, demonstrating strong project execution capabilities and adding important weight to its bidding for the more core compression plant project. Keywords: State owned Enterprise News Network, State owned Enterprise News Latest News

Localized cultivation, from cooperation to co construction

Whether it can meet Saudi Aramco's strict "IKTVA" localization requirements has become a "ticket" to winning the contract, not just a "bonus point". The Saudi government has explicitly required international contractors to drive the development of local industries through regulations issued by the General Administration of Localization and Government Procurement. Chinese enterprises have demonstrated excellent strategic adaptability in this regard. They not only meet the hard targets by setting up local companies and hiring a large number of local technicians and managers in Saudi Arabia, but also deeply integrate into the Saudi economy by establishing a local supply chain system, conducting long-term technical training, and even keeping key equipment locally depreciated in Saudi Arabia. Saudi Aramco CEO Amin Nasser has pointed out that 97% of the pipeline materials for the MGS3 project have been locally manufactured. Sinopec was awarded the title of "Outstanding Chinese funded Project in Saudi Arabia for 2024" for its outstanding performance in implementing pipeline projects, such as using Saudi project managers and vigorously cultivating local subcontractors. This marks a shift in the role of Chinese enterprises in Saudi Arabia from simple engineering contractors to long-term strategic partners that help upgrade Saudi industries. The simultaneous promotion of bond financing and project bidding also clearly indicates that Saudi Arabia is fully committed to promoting the arrival of its natural gas era with firm determination and sufficient capital, and Chinese enterprises have become important participants and co builders in this historical process.Editor/Gao Xue