Hyundai Engineering has signed a Project Implementation Agreement (PIA) for the Karachaganak Gas Processing Plant (KGPP) ordered by QazaqGaz, Kazakhstan’s state-owned gas company, and has entered the negotiation stage for a full Engineering, Procurement and Construction (EPC) contract. The project is being pursued through a consortium structure in which Hyundai Engineering handles engineering and procurement while the Kazakhstan unit of Italian EPC firm SICIM handles construction and commissioning. The total project cost is reported to be approximately 1.7 trillion Kazakhstani tenge (about $3.7 billion), making it a large-scale gas processing infrastructure project.
The project involves constructing a new gas processing facility (KGPP) near the Karachaganak gas field in northwestern Kazakhstan, ordered by QazaqGaz, Kazakhstan’s state-owned gas company. The winning consortium consists of Hyundai Engineering and the Kazakhstan unit of Italian EPC firm SICIM, with Hyundai Engineering responsible for engineering and procurement and SICIM’s Kazakhstan unit responsible for construction and commissioning, reflecting a clear division of roles. This type of division is understood to reflect a common approach in large overseas gas processing plant projects, in which a consortium combines a Korean EPC firm’s design capabilities with a local partner’s construction execution capacity to meet the client’s requirements. The specific process technology applied and any overseas licensor have not been identified in the report.
The total project cost for the Karachaganak Gas Processing Plant is reported at approximately 1.7 trillion Kazakhstani tenge, or roughly $3.7 billion. The facility’s processing capacity is reported at 5 billion cubic meters of raw gas per year, with a target completion date of 2030. The Hyundai Engineering-led consortium received a Letter of Award (LOA) in May 2026, then signed the PIA on September 15, 2026, moving into the EPC main contract negotiation stage.
The Karachaganak gas field is one of Kazakhstan’s major gas and condensate fields, and the expansion of the gas processing facility is reported to be part of QazaqGaz’s downstream investment to expand its domestic gas processing and supply capacity and modernize related infrastructure. The roughly four-month span between receiving the LOA and signing the PIA is understood to reflect the standard process of finalizing project terms and scope ahead of the main contract in a large state-backed infrastructure project.
Central Asia has recently seen a series of orders for downstream gas processing infrastructure linked to domestic gas field development, and this project reflects a typical structure in which a state-owned energy company entrusts the work to a large overseas EPC consortium. Dividing engineering and procurement from construction and commissioning between separate EPC firms aligns with a recent trend in large plant procurement, in which clients spread risk while securing specialized expertise in each area. A gas processing infrastructure project of this scale, valued at $3.7 billion, is expected to generate substantial follow-on demand across the equipment supply chain, including piping, instrumentation, and rotating machinery, creating opportunities not only for the lead EPC contractor but also for subcontractors and equipment suppliers. The staged contracting process — from LOA to PIA to a main contract — illustrates how closely terms are negotiated with clients in large overseas plant awards. Because gas processing infrastructure is directly tied to feedstock supply for downstream petrochemical and power generation projects, the progress of this project is also worth watching as an indicator of the broader trend in gas infrastructure investment across Central Asia.
The most important next step is the timing of the formal EPC main contract, expected to follow the PIA, as this stage should finalize concrete contract terms and the final contract value. The construction start date and detailed schedule following the EPC contract, as well as progress toward the 2030 completion target, also warrant continued monitoring. There is also the possibility that QazaqGaz will award additional follow-on infrastructure projects related to the Karachaganak gas field, making it worth watching whether this consortium or competing EPC firms secure further contracts. Since the applied process technology and licensor have not yet been disclosed, it remains to be seen whether further details emerge once the main contract is signed.