Aramco awards major gas pipeline work to Saudi KAD

Saudi KAD said on Monday it has won a contract from national energy giant Saudi Aramco for extending the role of natural gas in the oil producer’s energy mix.

The company will engineer, procure, construct and commission a gas pipeline network totalling 1,118 km (694.69 miles) in length, its statement said.

Supporting systems, such as valve stations, fibre optic cables and metering systems, are also part of the contract. The work is related to the Master Gas System 2 (MGS 2) and the Fadhili gas programme.

No value for the contract was given in the statement, although a source familiar with the matter said it was worth in the region of SAR5bn ($1.33bn).

The world’s top oil exporter is pressing ahead with gas-related projects to meet rising domestic demand and conserve oil for export and refining.

MGS 2 will raise the capacity of the system which constitutes the kingdom’s main gas pipeline to 12.5 billion cubic feet of gas a day (cfd) by 2018 from 8.4 billion cfd currently.

China’s Shandong Electric Power Construction Corp (SEPCO) is executing the first phase of the MGS expansion, installing booster gas compressor stations due to be complete by the end of 2016.

The MGS was built in the mid-1970s to gather and process associated gas from oil wells for use by domestic industries.