The local Azmeel Contracting has been awarded an estimated SR1.9bn ($510m) contract by state oil firm Saudi Aramco for work on package one of the Ajyal residential development in South Dhahran.

The contract involves the construction of 955 villas, a mosque, two schools and related infrastructure work.

It is understood that a SR1.6bn deal for packages three and four is currently being negotiated with China’s Sinohydro.

The Ajyal residential development, which is expected to be completed in 2020, will be made up of 2,400 villas for Aramco employees.

In July, MEED reported that Azmeel had been awarded a SR1bn contract by Aramco for the construction of housing units in Dhahran.

According to sources close to the project, work on 266 units that are part of package six of the Dhahran staff compound in the Eastern Province is expected to start at the end of the month.

Azmeel was also awarded a $240m contract for the construction of housing units in the Jubail area. Construction has already started on the scheme, which is expected to be completed within 24 months, according to a company spokesperson.