Saudi Aramco CCUS, $1.5 B Larsen & Toubro Contract, 9 Mtpa Jubail Hub, and 3 Key Projects (2021 to 2025)

Saudi Aramco Shifts CCUS Strategy from Niche EOR to Giga-Project Scale

In 2025, Saudi Aramco executed a strategic pivot from small-scale carbon capture for enhanced oil recovery (EOR) to developing one of the world’s largest carbon capture, utilization, and storage (CCUS) hubs, signaling a new industrial-scale approach to decarbonization.

• Between 2021 and 2024, Aramco’s CCUS activities were defined by its operational projects at Uthmaniyah and Hawiyah, which capture a combined 1.55 Mtpa of CO₂ primarily for use in EOR, a mature application designed to maximize hydrocarbon output.
• The strategic shift occurred in 2025 with the formal launch of the Jubail CCUS Hub, a project focused on large-scale sequestration to decarbonize industrial clusters. This moves beyond using CO₂ as a commodity for oil recovery toward establishing permanent storage infrastructure.
• The first phase of the Jubail hub targets 9 Mtpa of capture capacity by 2027, a nearly six-fold increase over Aramco’s entire operational capacity prior to 2025. This scale is designed to create a carbon management service for the entire Jubail industrial region.
• Alongside this large-scale deployment of proven technology, Aramco launched its first Direct Air Capture (DAC) pilot in March 2025. This dual-track strategy indicates an effort to master current commercial technology while developing capabilities in nascent, future-focused carbon removal solutions.

CCUS Market to Exceed $75B by 2035

This chart’s projection of a $75 billion market by 2035 provides the macro-economic context for Saudi Aramco’s strategic shift to ‘giga-project scale,’ illustrating the massive future market the company aims to capture.

(Source: Evolvance Market Research)

$1.5 B EPC Contract Signals Saudi Aramco’s Financial Commitment to Jubail Hub

Saudi Aramco’s financial strategy in 2025 centered on a single, massive capital expenditure to anchor its national CCUS ambitions, supplemented by smaller investments in early-stage technologies to build future capabilities.

• The definitive investment of 2025 was the award of a $1.5 billion Engineering, Procurement, and Construction (EPC) contract to Larsen & Toubro for the gas compression and dehydration facilities at the Jubail CCUS hub. This commitment moves the project from planning into physical development.
• This investment supports a project capturing CO₂ at a cost of approximately $45-$60 per ton, which is economically viable for large point-source emitters. This contrasts sharply with the $400 to $700 per ton cost associated with the DAC technology Aramco is simultaneously piloting.
• In April 2025, Aramco Ventures participated in a seed funding round for Ucaneo, a German DAC startup. This small, venture-style investment provides early access to potentially disruptive technologies without the capital risk of a large-scale pilot.
• The company also finalized its acquisition of a 50% stake in the Blue Hydrogen Industrial Gases Company (BHIG). This investment creates a foundational customer for the Jubail CCUS infrastructure, directly linking the viability of its blue hydrogen ambitions to the success of its carbon capture projects.

Table: Saudi Aramco Key 2025 Carbon Capture Investments

Saudi Aramco 3 Strategic Alliances Shape the Jubail CCUS Project (2025)

In 2025, Saudi Aramco established a network of specialized partners to de-risk the development of the Jubail CCUS hub, combining its own capital and operational scale with global leaders in technology, engineering, and industrial gas supply.

• Prior to 2025, Aramco’s carbon capture efforts were largely internal R&D initiatives or projects with standard EPC contractors. The 2025 strategy shifts to forming deep, equity-level joint ventures with technology specialists to co-develop large-scale infrastructure.
• The cornerstone partnership of 2025 was the shareholders’ agreement with industrial gas leader Linde and technology giant SLB. This joint venture structure shares the financial risk and operational burden of developing the 9 Mtpa Jubail hub.
• The partnership with Larsen & Toubro via a $1.5 billion EPC contract provides the construction and engineering expertise required for a project of this magnitude, securing a critical part of the execution supply chain.
• The collaboration with Siemens Energy on the DAC pilot, while small in scale, establishes a direct relationship with a leading technology provider in a high-growth, future-facing segment of the carbon removal market.

Chart Outlines Saudi Vision 2030 Energy Strategy

This chart provides the high-level strategic context for the alliances discussed in the section, showing how partnerships for projects like the Jubail CCUS hub are integral to achieving the broader goals of Saudi Vision 2030.

(Source: ScienceDirect.com)

Table: Saudi Aramco 2025 CCUS Partnerships

Saudi Arabia as Epicenter, Saudi Aramco Concentrates CCUS Activity in Jubail

Saudi Aramco’s geographic strategy for carbon capture is hyper-focused on Saudi Arabia, specifically on creating a massive, centralized hub in the Jubail Industrial City to serve as the backbone for the Kingdom’s national decarbonization goals.

• Between 2021 and 2024, Aramco’s operational CCUS footprint was tied to the locations of its gas processing plants, such as Uthmaniyah and Hawiyah. These were point-source solutions serving single assets.
• The year 2025 marks a shift to a hub-and-spoke model. The selection of Jubail is strategic, as it is one of the world’s largest industrial cities, providing a dense concentration of third-party CO₂ emitters that can become future customers for the CCUS infrastructure.
• Unlike CCUS projects in regions like North America or Europe that are often distributed across various industrial sites, Aramco’s approach creates a single, state-sponsored center of gravity. This concentration of capital and infrastructure aims to build a complete regional ecosystem for carbon management.
• The launch of the DAC pilot in Dhahran, Aramco’s corporate headquarters and R&D center, keeps the development of this frontier technology close to its core technical teams, reinforcing the domestic focus of its entire CCUS program.

Saudi Emissions Dominated by Power and Industry

This chart directly explains the rationale for concentrating CCUS activity in Jubail, a major industrial hub. It shows that power and industry are the primary sources of emissions, making them the logical targets for carbon capture.

(Source: ScienceDirect.com)

Saudi Aramco Technology Strategy: Commercial Scale for Today, Pilot for Tomorrow

Saudi Aramco is executing a dual-track technology strategy, aggressively deploying mature, commercially viable point-source capture technology at scale while simultaneously running small, targeted pilots on high-cost, next-generation technologies like Direct Air Capture.

• Before 2025, the company’s focus was on optimizing its operational post-combustion capture units at Uthmaniyah and Hawiyah, which represent proven, if incremental, technology applications.
• The Jubail hub project, solidified in 2025, represents a full-scale commitment to commercially ready post-combustion capture technology. The decision to build a 9 Mtpa facility indicates confidence that the technology is mature enough for giga-project deployment.
• The launch of the 12-ton-per-year DAC pilot in March 2025 is not a commercial play but a strategic R&D initiative. Its purpose is to generate data on sorbent performance in the Saudi climate to inform future investment decisions, essentially buying an option on a technology that is not yet commercial.
• This bifurcated approach allows Aramco to make immediate, large-scale progress on its emission reduction goals using proven methods while avoiding major capital investment in immature technologies that are still an order of magnitude more expensive.

Carbon Capture Market Drivers and Restraints Analyzed

This chart supports the section on technology strategy by outlining the market forces at play. Aramco’s strategy to use commercial-scale technology for today’s needs while piloting future tech is a direct response to these market drivers and restraints.

(Source: Coherent Market Insights)

SWOT Analysis for Saudi Aramco CCUS Ambitions

The strategic shift in 2025 solidified Saudi Aramco’s strengths in large-scale project execution while exposing its strategy to new technological and market-based risks.

• Strengths: Access to capital and vast geological storage formations are now coupled with a clear commitment to build market-making infrastructure.
• Weaknesses: The economic viability of the entire model, particularly for third-party emitters, will depend on future policy support or a robust carbon pricing mechanism.
• Opportunities: The Jubail hub creates the opportunity for Aramco to become the dominant carbon management service provider for the entire Gulf region and a leader in the production of low-carbon products like blue hydrogen.
• Threats: Rapid cost reductions in competing decarbonization technologies, such as green hydrogen or advanced renewables, could challenge the long-term economic case for large-scale fossil-fuel-based CCUS.

Saudi Climate Policies Rated ‘Critically Insufficient’

This chart serves as a primary example of a ‘Threat’ or ‘Weakness’ that would be detailed in the SWOT analysis. The ‘Critically Insufficient’ rating highlights external pressure and reputational risk that influences Aramco’s CCUS ambitions.

(Source: Climate Action Tracker)

Table: SWOT Analysis for Saudi Aramco’s CCUS Strategy

Scenario Modelling: Watch Saudi Aramco Jubail Hub Progress and DAC Data

The success of Saudi Aramco’s CCUS strategy now hinges on two critical pathways: the physical construction of the Jubail hub and the technical learnings from its DAC pilot.

• If this happens: Construction on the Jubail hub proceeds on schedule following the February 2025 EPC award to Larsen & Toubro. Watch this: Announcements of major equipment orders, site preparation milestones, and progress reports from the Aramco-Linde-SLB joint venture. These could be happening: This would validate the giga-project execution model and keep Aramco on track for its 2027 target of 9 Mtpa, building confidence in the Kingdom’s larger 44 Mtpa goal.
• If this happens: Initial performance data from the Dhahran DAC pilot, launched in March 2025, becomes available. Watch this: Any publications or announcements from Aramco or Siemens Energy regarding the performance of the new sorbent materials in the Saudi climate. These could be happening: Favorable results could lead to a second, larger DAC pilot announcement. Poor results could see Aramco quietly focus its efforts entirely on point-source capture and delay further DAC investment.
• If this happens: The Saudi government introduces a national carbon policy or incentive structure. Watch this: Any mention of a carbon tax, emissions trading scheme, or tax credits similar to the U.S. 45 Q in official government announcements or policy papers. These could be happening: Such a policy would dramatically improve the business case for third-party emitters to sign up for offtake from the Jubail hub, de-risking Aramco’s investment and accelerating the development of a true carbon market.

The questions your competitors are already asking

This report covers one angle of Saudi Aramco’s CCUS scale-up strategy. The questions that matter most depend on your work.

• Saudi Aramco investments and funding. Is the Jubail Hub on track for its 9 Mtpa target by 2027?
• What is actually happening with the Jubail CCUS Hub since the $1.5B Larsen & Toubro contract announcement?
• What are the opportunities for carbon capture technology suppliers in Saudi Arabia’s industrial decarbonization market?

This report does not answer these. Enki Brief Pro does.

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