Hyundai Engineering & Construction Co. has won a $145 million deal in Saudi Arabia, boding well for the leading South Korean builder’s business prospects in the latter half of this year after its stellar earnings earlier this year on a slew of major overseas construction orders.
Hyundai E&C, also an affiliate of Korea’s auto behemoth Hyundai Motor Group, announced on Tuesday that it signed a contract with Saudi Electricity Company (SEC-COA) on Monday to build a high-voltage direct current (HVDC) power transmission line in the Middle Eastern nation.
The project dubbed Saudi’s Neom-Yanbu 525kV HVDC Transmission Line aims to construct an HVDC power transmission line between Neom, a new urban area planned by the Kingdom in its northwestern Tabuk Province, and Yanbu, a port city on the Red Sea coast of western Saudi Arabia, stretching 605 kilometers.
The Korean builder will be responsible for a Portion 1 project to build a 207-kilometer HVDC transmission line and about 450 transmission towers. It aims to complete the $145 million construction project by July 2027.
The latest major deal has heightened the second-half outlook for the Korean builder’s business after it enjoyed upbeat earnings on a series of major overseas orders in the first half.
Hyundai E&C won a total 20.7 trillion won ($16.2 billion) in new contracts in the first six months of this year, including a $5 billion deal for Saudi Aramco’s Amiral project.
The company has already met 71.3% of this year’s order target of 29.1 trillion won on a consolidated basis, according to the company.
The company attributed its strong earnings mainly to overseas projects such as the Saudi Arabian Neom tunnel, Panama Metro Line 3 and Poland Olefin plant expansion constructions that gathered pace.
TECHNOLOGY LEADERSHIP
Hyundai E&C has landed on the latest HVDC transmission line deal on a turnkey basis, being responsible for the whole construction process, from engineering to procurement and construction.
Hyundai E&C headquarters in Seoul
An HVDC power transmission system uses a direct current for electricity transmission, with voltages between 100 kilovolts (kV) and 800 kV.
It is also called a power superhighway because it can transport significantly more power over greater distances than the common high-voltage alternative current (AC) line.
An HVDC line requires less conduction and incurs fewer power losses than an AC line, a reason why it is considered more stable and preferred of late as the next-generation electric power transmission line, especially for new renewable energy transmission such as solar and wind power.
Since its foray into Saudi Arabia in 1976, Hyundai E&C has completed the construction of a total 33 power transmission lines in the Kingdom, including the 380kV Double Circuit Overhead Transmission Line (OHTL) between Hail and Al Jouf project signed in January 2021, said the Korean builder.
It is currently in charge of 16 major projects in the Middle Eastern country, including the Saudi Arabian Neom tunnel and Saudi Aramco’s Amiral project, it added.
Hyundai E&C shares traded at 38,000 won in Tuesday's morning session, up 1.6% from the previous session.
Write to Eun-Ji Shim at summit@hankyung.com Sookyung Seo edited this article.
