Lebanon’s Butec is the frontrunner for the estimated $70m contract for building works at the Shah Gas development in Abu Dhabi.

The contract is one of two construction packages that Italy’s Saipem is awarding as part of its engineering, procurement and design (EPC) work on the project.

If awarded, Butec will be responsible for constructing eight substation buildings and four equipment shelters.

“The deal is still being finalised. It is not sure that it will be Butec, but they are in a good position,” says a source at Saipem.

Saipem awarded the first package to Target Engineering, a subsidiary of the local Arabtec Holding, on 21 February. Target will construct 12 substation buildings and equipment buildings under a AED200m ($54m) contract, commencing work on 1 March.

Saipem were awarded three of the five EPC packages for the development of the Shah gas field by Abu Dhabi Gas Industries Company (Gasco) in May 2010. The contracts, worth a total of $3.5bn, cover the construction of a gas process plant, sulphur recovery and product pipelines.

Once the development of the field is complete, Shah will produce about 1 billion cubic feet a day (cf/d) of sour gas, which after desulphurisation would supply 540 million cf/d of usable natural gas.