Industry sources told Reuters that China’s Shandong Electric Power Construction Corp (SEPCO) has signed a contract to build a gas compressor station as part of the expansion of Saudi Arabia’s main gas pipeline.
The project, known as Master Gas System 2 (MGS 2), is meant to raise the system’s capacity to 12.5 billion cubic feet of gas a day (cfd) by 2018 from 8.4 billion cfd currently.
No clear value for the contract has been set but sources estimated it at around $700-$800m. The project will be overseen by Saudi Aramco.
According to Trade Arabia Sepco is already executing the first phase of the expansion, installing booster gas compressor stations due to be complete by the end of 2016. This alone will help raise capacity to 9.6 billion cfd.
The MGS was built in the mid-1970s to gather and process associated gas from oil wells for use by domestic industries and Saudi Arabia has been placing an increasing emphasis on gas-related projects to take pressure off oil.