The 36-year-old Spaniard carded a two-under-par 70 to advance to 11 under and remain three clear of Dutchman Wil Besseling.
However, having at one stage threatened to surge clear in his bid for a fifth European Tour title, Larrazabal, right, was disappointed as he made 5 at three of his last four holes.
“It was a disappointing finish, but it was playing tricky,” said Larrazabal, whose last win came back in 2015. “I didn’t play as good as yesterday but I played pretty solid. My game plan is not three 5s in the last four, that’s why I’m disappointed – obviously I’m happy with the lead.
“I hung in there and we will see; it will be a fun Sunday afternoon. If I shoot in the 60s these guys are going to have to put some run on [to catch] me tomorrow.”
First-round leader Besseling remains second after matching Larrazabal’s 70, with home favourite Branden Grace a shot further back in third after carding 71.
Larrazabal birdied the fourth and sixth but was struggling with his swing and found water for the second day running at the seventh.
An excellent third salvaged a bogey, but another wayward drive at the ninth was fortunate to stay dry and led to another dropped shot.
Larrazabal birdied the 10th and spectacularly chipped in at the 12th to reassert his dominance before holing from 20 feet on the 14th.
England’s Marcus Armitage eagled the last to share fourth on five-under with South African Zander Lombard.
David Drysdale, who finished second behind American David Lipsky in this event last year, is the leading Scot heading into the final round. Closing in on his 500th European Tour appearance, Drysdalre carded a two-under 70 to sit joint-14th on one-under, two shots ahead of Challenge Tour graduates Calum Hull (71) and Connor Syme (73).
Grant Forrest (73) and David Law (76) sit on four-over and seven-over respectively.