• Sepco carrying out compressor package in first phase of expansion
  • Project is part of Aramco strategy to boost gas capacity
  • Contract could be awarded by end of October

China’s Shandong Electric Power Construction Corporation (Sepco) is the frontrunner to win an estimated $800m contract to build a gas compressor station for Saudi Aramco, according to sources familiar with the project.

Sepco is expected to be appointed the engineering, procurement and construction (EPC) contractor, and could sign the deal by the end of October.

Sources tell MEED it is not clear whether Sepco is the low bidder for the contract, but it is expected to win due to its satisfactory performance on the first phase of the kingdom’s Master Gas System Expansion (MGSE).

Japanese group JGC is among the other companies vying for the EPC contract, which is part of the second phase of the MGSE.

The first phase of the MGSE is under execution after several awards made by Aramco in 2014. These include pipeline contracts to Italy’s Saipem and the UAE’s Dodsal, as well as a $1.3bn deal to Sepco for the construction of two booster gas compressor stations.

The first phase will boost the MGSE’s capacity to 9.6 billion cubic feet a day (cf/d) from 8.4 billion cf/d and the second phase will expand this further to 12.5 billion cf/d.

Aramco is also expected to award four EPC packages on pipelines for the MGSE later this year, having received bids in the second quarter. The pipeline packages comprise: western region pipeline; central region pipeline; eastern region pipeline; and east-west pipeline 1 upgrade.

Aramco is investing billions of dollars in increasing its gas production for domestic use. This includes associated and non-associated output, as well as non-conventional forms of the resource, such as tight gas.

The Master Gas System is operated by Aramco and is one of the world’s largest hydrocarbons networks. Construction started on the scheme in the mid-1970s as a means to transfer gas across the kingdom to support industrialisation. The system became fully operational in 1982 and allows Aramco to market all of its gas domestically.

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