EPC in oil and gas industry is a contract model for the engineering, procurement, and construction of refineries, pipelines, LNG terminals, and offshore platforms. An EPC company is responsible for designing (engineering), sourcing materials and equipment (procurement), and executing the physical construction (construction). This turnkey approach ensures that projects are delivered efficiently, on time, and within budget.

EPC contracts are structured to transfer project risk from the client (owner) to the contractor. The EPC contractor is responsible for delivering a functional facility, often on a lump-sum, fixed-price basis. EPC contracts are commonly used for seamless coordination between multiple phases in the oil and gas industry.

EPC companies help deliver complex projects efficiently by integrating expertise across various stages. They ensure regulatory compliance, reduce project delays, and optimize costs. In this blog, we’ll explore what EPC is in Oil & Gas and the Top 10 EPC companies in the world.

Detailed Breakdown of Engineering, Procurement, and Construction in Oil and Gas

The EPC model is a complex execution of different stages of an oil and gas infrastructure project. It provides a structured approach to designing, sourcing, and building complex infrastructures. Here is the explanation of the importance, methodologies, challenges, and best practices of each stage.

Engineering

Engineering is the foundation of oil and gas EPC projects. It involves conceptualizing, designing, and planning the entire infrastructure to ensure technical, regulatory, and operational requirements.

1. Feasibility Studies: Construction of a large-scale oil and gas infrastructure starts with feasibility studies. It ensures the technical, economic, and environmental feasibility of the project.
2. Designing: The designing phase converts the feasibility studies into executable designs.
3. Compliance: The last stage of engineering makes sure the construction of this infrastructure will be in industry standards like ASME (American Society of Mechanical Engineers), API (American Petroleum Institute), and ISO (ISO 9001 & ISO 14001).

Common engineering challenges and mitigation strategies include: 

Procurement

The procurement stage of engineering includes acquiring all materials, equipment, and services required for project execution. Procurement ensures timely and cost-effective delivery of quality resources required for the completion of the project. Here are the six important things to consider for procurement:

• Identification of required components
• Supplier selection and contract negotiations
• Cost Management Strategies
• Bulk purchasing agreements
• Supplier relationship management (SRM)
• Real-time procurement tracking using ERP systems like SAP or Oracle

Common procurement challenges and mitigation strategies to consider: 

Construction

Construction is the last and final stage of an EPC contract. Different stages of construction include site preparation, installation, and assembly, along with project completion benchmarks. Offshore construction presents additional complexities, including harsh marine conditions, logistical constraints, and deep-water engineering challenges.

Steps in Site Preparation

Before construction begins, the site must be properly prepared to ensure safety and efficiency. Key activities for both onshore and offshore projects include:

• Onshore: Land clearing, grading, and leveling
• Offshore: Seabed survey and preparation, ensuring foundation stability
• Installation of temporary facilities (worker accommodations, storage areas)
• Environmental impact mitigation: (soil stabilization, drainage systems for onshore; artificial reef creation, marine life monitoring for offshore)

Installation and Assembly Process

Construction involves assembling all structural, mechanical, and electrical components according to engineering plans. Offshore construction differs due to deep-sea conditions and remote locations.

Onshore Construction:

• Building foundations, frameworks, and support structures
• Installing pipelines, pressure vessels, and power systems
• Implementing control systems for operational efficiency

Offshore Construction:

• Fixed and Floating Platforms: Installation of topsides, subsea infrastructure, and mooring systems
• Subsea Pipelines and Cables: Laying and connecting underwater pipelines and power cables using specialized vessels
• Heavy Lifting Operations: Deployment of large modules using crane barges and dynamic positioning ships

Timelines and Project Completion Benchmarks

Construction timelines must align with EPC contract deadlines to avoid penalties and cost overruns. Best practices include:

• Critical Path Method (CPM): Identifying key milestones to prevent offshore logistics delays
• Lean Construction Techniques: Minimizing material waste and optimizing workforce efficiency on offshore platforms
• Regular Progress Audits: Conducting inspections using remote monitoring systems like ROVs (Remotely Operated Vehicles) and drones for offshore projects 

Types of EPC Contracts in the Oil and Gas Sector

The oil and gas industry relies on various contract models to execute complex infrastructure projects. These contracts define the responsibilities of contractors, optimize costs, and ensure the project meets regulatory requirements. Below are the key types of EPC contracts commonly used in the oil and gas sector.

EPCM - Engineering, Procurement, and Construction Management

EPCM contracts focus on the management aspect of a project. The contractor manages engineering, procurement, and construction while managing subcontractors. It gives the project owner more decision-making and flexibility in selecting vendors and contractors.

Example of EPCM contract: ​In July 2024, China Petroleum Engineering Construction (CPECC) secured a USD 397 million EPCM contract from ADNOC Onshore. This project involves the construction, renovation, and upgrading of offsite facilities at the Asab oilfield, as well as the nearby Sahil, Shah, Qusahwira, and Mender satellite oilfields.

This contract exemplifies the EPCM model, wherein the CRECC manages the engineering, procurement, and construction phases, providing oversight and coordination to Asab oilfield upgradation project.

EPIC - Engineering, Procurement, Installation, and Construction

EPIC contracts are more viable for offshore oil and gas projects such as platforms, pipelines, and subsea infrastructure. The EPIC contractor is responsible for engineering, procurement, installation, and construction of oil and gas infrastructure projects.

Example of an EPIC contract: In July, 2024, Halliburton signed a USD 2.5 billion contract for the development of the Jafurah gas field in Saudi Arabia. The contract covers Engineering, Procurement, Installation, and Construction (EPIC) services, ensuring the full-scale development of the unconventional gas project. 

Halliburton is responsible for delivering gas processing infrastructure, well construction, and advanced production facilities to support Saudi Aramco’s strategic energy expansion. This large-scale EPIC project highlights the importance of integrating engineering and installation processes to enhance operational efficiency and meet long-term energy demands in the region.

EPCC - Engineering, Procurement, Construction, and Commissioning 

EPCC contracts extend beyond traditional EPC contracts by incorporating commissioning. This ensures the facility is fully tested and operational. This model is commonly used in oil and gas projects where it is essential to verify that all systems function correctly before handover.

Example of EPCC contract: ​In December 2024, Samsung E&A secured a USD 955 million EPCC contract to construct a biorefinery in Malaysia. Samsung E&A received the Letter of Award (LoA) for the EPCC contract from Enilive S.p.A on behalf of a joint venture comprising Petronas Mobility Lestari Sdn. Bhd. (a subsidiary of Petronas), Enilive, and Euglena Co., Ltd.

Here, Samsung is responsible for the comprehensive execution of the project, encompassing engineering design, procurement of necessary materials and equipment, construction of the facility, and commissioning to ensure operational readiness.

EPCIC - Engineering, Procurement, Construction, Installation, and Commissioning

EPCIC contracts provide a complete solution covering all phases, from design to operational readiness. This type of contract is widely used in complex offshore projects, where installation and commissioning are critical for safety and efficiency. EPCIC ensures a turnkey approach, minimizing risks and streamlining the transition from construction to production.

Example of EPCIC contract: ​In June 2024, Genting Berhad's subsidiaries entered into an Engineering, Procurement, Construction, Installation, and Commissioning (EPCIC) contract with Wison New Energies to deliver Indonesia's first floating liquefied natural gas (FLNG) vessel.

The project valued approximately USD 1 billion encompasses all phases of the project including engineering design, procurement of materials, construction of the vessel, its installation at the deployment site in Teluk Bintuni, West Papua, and the final commissioning to commence operations.

Split EPC Contract

A Split EPC Contract is a contract structure that divides the traditional EPC contract into two or more separate agreements. This model is particularly common in the Middle East and South Asia, including countries such as Egypt and India. The most basic split EPC structure consists of:

• An onshore construction contract covering site-based construction, installation, and local regulatory compliance. 
• An offshore supply contract managing the procurement and delivery of equipment, materials, and design work from outside the country.

A simple split EPC contract helps reduce contract prices by allowing the contractor to save on onshore taxes, particularly indirect and corporate taxes. It will also minimise the cost of complying with local licensing regulations by conducting key design and engineering activities offshore.

A complex split EPC contract offers similar cost advantages but comes with increased risks to the project company, mainly due to the lack of single-point responsibility. This structure requires careful coordination between multiple contractors, making risk management and accountability more challenging. 

List of Top 10 Oil and Gas EPC Companies in the World

EPC Market in the Oil and Gas Industry

The EPC market in the oil and gas industry has a market size of around USD 480 billion in 2025. According to Blackridge Research’s Global Oil & Gas EPC Market Report, the Oil and Gas EPC market is projected to grow further, reaching approximately USD 598.17 billion in 2030 at a CAGR of 4.5%. 

The EPC project growth is mainly driven by several factors, including global energy demand, technological advancements, exploration, and production activities. The increased industrial activities in developing countries boost the need for oil and gas, necessitating new projects and infrastructure. For instance, the Asia Pacific region and Middle East, driven by countries like China, India and Saudi Arabia, are seeing rapid growth due to rising energy requirements.

Here is the list of some of the largest EPC oil and gas companies in India: 

• Larsen & Toubro (L&T)
• Reliance Industries
• Hindustan Construction Co. (HCC)
• Punj Lloyd 

Technological advancements are another factor that upscales the EPC market in the oil and gas industry. Rapid growth in digitalization, including AI, IoT, and cloud computing, is enhancing project efficiency and reducing costs. Automation in construction and monitoring improves safety and precision in hazardous environments. Technological developments like hydraulic fracturing and horizontal drilling are revitalizing onshore production, particularly in shale-rich regions.

Also, increased investments in both onshore and offshore projects are one of the important factors driving the demand. The upstream segment, accounting for 42.6% of the market, reflects significant project involvement.

There are several challenges in the global EPC market like stricter environmental norms and the energy transition towards renewable energy will slow the growth. Fluctuations in oil and gas prices can affect project economics, leading to postponements or cancellations. The market growth is also affected by global events, such as pandemics and geopolitical tensions affecting the availability of materials and skilled labour, crucial for EPC project success.

Conclusion

The EPC model plays a crucial role in the oil and gas industry by ensuring efficient project execution, cost optimization, and risk management. From conceptual engineering to procurement and final construction, EPC contracts streamline complex projects. This helps the companies to meet regulatory requirements, reduce delays, and enhance operational efficiency.

As the global oil and gas sector continues to expand, driven by increasing energy demand, technological advancements, and infrastructure investments, EPC companies remain at the forefront of delivering large-scale projects. The market is projected to reach USD 598.17 billion by 2030, highlighting strong growth opportunities for EPC contractors worldwide.

As energy market trends shift towards more efficient and environmentally friendly operations like natural gas, the role of EPC companies faces significant threats. With major players EPC firms like TechnipFMC, Worley, Saipem, Bechtel, and Petrofac leading the industry, EPC services are set to evolve further with the integration of digitalization, automation, and sustainable energy solutions. 

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