Saudi Aramco has awarded two major contracts on the Ajyal residential development in Dhahran in Saudi Arabia’s Eastern province, bringing the total awards value for the project to over $1.5bn.

Aramco split the engineering, procurement and construction package 2 into two packages, awarding the larger package to the local Azmeel Contracting for about $220m, according to sources familiar with the project.

Jubail-based Khonaini International Company won the second package 2 deal, valued at $160m.

According to one source, Aramco cancelled part of the package 2 scope that called for the construction of apartment buildings due to the price coming over-budget. It is going to carry out value engineering to reduce the cost of the apartments.

Package 2 is part of the ‘2,400 villas’ project, which is expected to be completed in 2020. It will be made up of 2,400 villas to accommodate Aramco employees close to the company’s main operations.

Package 2 covers 700 villas as well as public amenities and infrastructure works.

Earlier this month, MEED revealed that packages 3 & 4 had been awarded to a joint venture of Azmeel Contracting and China’s state-owned Sinohydro in a deal worth about $426m. The scope of packages 3 & 4 covers 720 villas, public amenities and infrastructure works.

In August 2015, Azmeel Contracting was awarded an estimated $510m EPC contract on package 1 of the project. The scope for package 1 covers 995 villas, a mosque, two schools and public amenities.

A separate package was been awarded to build two schools at the housing development. The contract, worth an estimated $226m, was awarded to Sinohydro, industry sources told MEED.