A level-par 71 was enough to give Larrazabal a two-shot lead over England's Andrew Johnston as a combination of swirling winds and firm greens sent scores soaring at the notoriously difficult former Ryder Cup venue.
At three-under and one-under respectively, Larrazabal and Johnston were the only players to finish in red figures, with Mike Lorenzo-Vera and Peter Hanson the only players to break par with rounds of 70 as the cut fell at nine-over par.
Irish duo Paul Dunne and Peter Lawrie both made the cut although both are a long way back.