Arkad-ABB, subsidiary of Saudi Arabia-based Arkad Group, has emerged as the frontrunner for the contract to work on the expansion of the existing Algeria-Spain gas pipeline.

Spain-based Medgaz, the operator of the pipeline, has undertaken a project to increase the gas transportation capacity of the existing 210-kilometre long pipeline from Algeria to Spain.

Medgaz in early April floated a tender for engineering, procurement and construction (EPC) works for an additional turbo compressor train to be commissioned at the Beni Saf compression station in Algeria. The value of this package is estimated to be worth $75.5m.

Arkad-ABB has submitted the lowest bid on the project, a source tells MEED. The other bidders on the project were UK-based Petrofac and Spain's Tecnicas Reunidas.

“The formal contract is expected to be awarded to Arkad-ABB in June,” the source says.

EPC works on the project are also expected to commence in June, with the duration set to be 18 months.

The existing trans-Mediterranean subsea pipeline transports 8 billion cubic metres a year from Algeria’s Beni Saf to Almeria on Spain’s southern coast.

Medgaz is now looking to raise the 24-inch pipeline’s capacity to 9.8 billion cubic metres a year, mainly through the installation of an additional compressor train in the Algerian Beni Saf compressor station.

MEED reported in February that Medgaz had started the process to prequalify contractors for the Medgaz phase 1 expansion project.

Medgaz was established by Algeria’s Sonatrach (20 per cent) and Spain-based Cepsa (20 per cent) in 2001. Other stakeholders in Medgaz include Iberdrola, Endesa, BP, Total and Gaz de France Suez, which have a 12 per cent stake each in the company.