diff --git a/packages/terraform/package.json b/packages/terraform/package.json
index b1ae027c..3b2e796f 100644
--- a/packages/terraform/package.json
+++ b/packages/terraform/package.json
@@ -16,5 +16,8 @@
   "license": "MIT",
   "main": "src/index.js",
   "builders": "./executors.json",
-  "generators": "./generators.json"
+  "generators": "./generators.json",
+  "dependencies": {
+    "@evops/hcl-terraform-parser": "^1.0.0"
+  }
 }
diff --git a/packages/terraform/src/graph.ts b/packages/terraform/src/graph.ts
new file mode 100644
index 00000000..77a43120
--- /dev/null
+++ b/packages/terraform/src/graph.ts
@@ -0,0 +1,66 @@
+import * as hclParser from '@evops/hcl-terraform-parser'
+import {
+  CreateDependencies,
+  RawProjectGraphDependency,
+  workspaceRoot
+} from '@nx/devkit'
+import * as fs from 'node:fs/promises'
+import * as path from 'node:path'
+import { DependencyType } from 'nx/src/config/project-graph'
+
+const isLocalPath = (path: string) => {
+  return path.startsWith('./') || path.startsWith('../')
+}
+
+export const createDependencies: CreateDependencies = async (_, ctx) => {
+  const results: RawProjectGraphDependency[] = []
+
+  const projectRootsToProject: [projectRoot: string, name: string][] =
+    Object.entries(ctx.projects).map(([name, project]) => [project.root, name])
+
+  for (const project of Object.keys(ctx.projects)) {
+    // find tf files to process in the project
+    const tfFilesToProcess =
+      ctx.filesToProcess.projectFileMap[project]?.filter((file) =>
+        file.file.endsWith('.tf')
+      ) ?? []
+
+    for (const file of tfFilesToProcess) {
+      const data = await fs.readFile(file.file)
+      const hclFile = hclParser.parse(data)
+      const moduleCalls = hclFile['module_calls']
+
+      for (const moduleCall of Object.values(moduleCalls)) {
+        const depSourcePathRel = moduleCall.source
+
+        if (!isLocalPath(depSourcePathRel)) {
+          continue
+        }
+
+        const depSourceAbs = path.resolve(file.file, depSourcePathRel)
+
+        const depSourceRelativeToWorkspace = path.relative(
+          workspaceRoot,
+          depSourceAbs
+        )
+
+        const targetProject = projectRootsToProject.find(([root]) =>
+          depSourceRelativeToWorkspace.startsWith(root)
+        )?.[1]
+
+        if (!targetProject || targetProject === project) {
+          continue
+        }
+
+        results.push({
+          type: DependencyType.static,
+          source: project,
+          target: targetProject,
+          sourceFile: file.file
+        })
+      }
+    }
+  }
+
+  return results
+}
diff --git a/packages/terraform/src/hcl-terraform-parser.d.ts b/packages/terraform/src/hcl-terraform-parser.d.ts
new file mode 100644
index 00000000..cfe978a4
--- /dev/null
+++ b/packages/terraform/src/hcl-terraform-parser.d.ts
@@ -0,0 +1,11 @@
+declare module '@evops/hcl-terraform-parser' {
+  export type HclDef = {
+    module_calls: {
+      [key: string]: {
+        source: string
+      }
+    }
+  }
+
+  export function parse(data: Buffer): HclDef
+}
diff --git a/packages/terraform/src/index.ts b/packages/terraform/src/index.ts
index e69de29b..b8ade72c 100644
--- a/packages/terraform/src/index.ts
+++ b/packages/terraform/src/index.ts
@@ -0,0 +1 @@
+export * from './graph'
diff --git a/yarn.lock b/yarn.lock
index e652360e..d858666c 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -5692,6 +5692,13 @@ __metadata:
   languageName: node
   linkType: hard
 
+"@evops/hcl-terraform-parser@npm:^1.0.0":
+  version: 1.0.0
+  resolution: "@evops/hcl-terraform-parser@npm:1.0.0"
+  checksum: 10/d48b92b594a04a10a513e9e2984ac48437348ff23ff0e898e6fdb612715bb0a20c66d176b57f2b828c7c8da1cd282763aed152bcf17c00f67ae2c061c78212fd
+  languageName: node
+  linkType: hard
+
 "@fastify/busboy@npm:^2.0.0":
   version: 2.1.1
   resolution: "@fastify/busboy@npm:2.1.1"
@@ -7345,6 +7352,8 @@ __metadata:
 "@nx-extend/terraform@workspace:packages/terraform":
   version: 0.0.0-use.local
   resolution: "@nx-extend/terraform@workspace:packages/terraform"
+  dependencies:
+    "@evops/hcl-terraform-parser": "npm:^1.0.0"
   languageName: unknown
   linkType: soft