Saudi Aramco has revived work on the $3bn Khurais oil field expansion after it was pushed back due to concerns related to costs, according to sources familiar with the project.

Italy’s Saipem was awarded the largest engineering, procurement and construction (EPC) package on the project for the central processing facilities, worth an estimated $2bn.

The engineering work for the main package is thought to have been completed with the contractor preparing to move onto the construction phase.

Saudi Arabia-based oil and gas sources told MEED earlier in the year that state oil producer Aramco was weighing up whether to proceed with the project due to cost concerns.

“The construction has not started yet… but the project has got traction and is now proceeding slowly,” said one industry source.

Aramco is now thought to be renegotiating contracts for the pipeline packages.

The oil major had already taken steps to manage cash flow by extending the execution phase of Khurais by another 12 months.

The site preparation work, which was awarded to the local Abdulrahman M Al Shalawi Est., is expected to be completed by the end of 2015.

Two other pipeline packages are included in the expansion and will be constructed by two local contractors. The Mazlij – Abu Jafan pipeline will be installed by Saudi KAD Construction and the Seawater pipeline package will be handled by HAK Group.

If Aramco sticks to its original plans, 300,000 barrels a day (b/d) of oil will be added to the field’s current capacity of 1.2 million b/d.

Khurais is located adjacent to the Ghawar oil field, one of the world’s largest, in the Eastern Province of the kingdom. The field began operations in 2009 and produces 1.2 million b/d of light Arabian crude, 320 million cubic feet a day (cf/d) of gas and 80,000 b/d of natural gas liquids (NGLs).

“I think real progress will happen in January after the close of the financial year,” said an industry source.