Saudi Aramco is expected to award three pipeline packages worth $1bn on its Master Gas System Expansion (MGSE) in December after completing a deal on the project’s compressor station, according to industry sources.

China’s Shandong Electric Power Construction Corporation (Sepco) recently won an estimated $750m engineering, procurement and construction (EPC) deal on the compressor booster station for phase two of MGSE.

MEED reported in September that Sepco was the frontrunner to win the package. Sources said it was not clear whether Sepco is the low bidder for the contract, but it was expected to win due to its satisfactory performance on the first phase of the MGSE.

State-owned Aramco is now eyeing the awards for three pipeline packages for the second phase of MGSE having received EPC bids from several contractors at the end of May.

The three pipeline packages are:

Package 1: Western region pipeline

The main scope of works includes the construction of 422 kilometres of 56 inch pipeline on Aramco’s East West Pipeline 2.

Package 2: Central region pipeline

Scope includes the construction of 226km of 46 inch pipeline on the East West Qassim Gas pipeline 1.

Package 3: Eastern region pipeline

Scope includes the construction of 150km of 56 inch pipeline on the Shedgum Riyadh Gas Pipeline 3 as well as 40km of 56 inch pipeline on the Shedgum Riyadh Gas 2.

Package 4, named East West Pipeline 1 Upgrade, has been cancelled, according to sources familiar with the project. The scope of the package comprised upgrade works on 10 sections of the existing pipeline covering 51km.

”The rest of the pipeline packages are valued at $1bn, based on the lowest bidder. Aramco has not decided on the award yet and they will make a decision in mid-December,” one source told MEED.

Saudi Aramco has not decided whether to award all three pipeline packages to one bidder or split the packages between bidding companies, the source added.

Companies submitting bids on the pipeline packages are thought to include:

• C.A.T Group (Lebanon)
• Dutco McConnell Dowell (UAE)
• Saipem (Italy)
• Saudi KAD Construction (Local)
• Tekfen Holding (Turkey)

The first phase of 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. The second phase will expand the capacity further to 12.5 billion cf/d.

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.