Saudi contractor Arkad has announced signing a facility agreement with regional energy sector lender Arab Petroleum Investments Corporation (Apicorp) for a Saudi Aramco project it is working on.

The loan of $54m will help Arkad in the construction of package 2 of Aramco’s Master Gas System in the central region of the kingdom.

The facility will mature in the first half of 2019.

The MGS national project is intended to support the development of Saudi Arabia’s non-associated gas, unconventional gas and related condensate reserves.

Once completed, the project will raise the system’s capacity to 12.5 billion cubic feet of gas a day (cf/d) from 8.4 billion cf/d currently. It will help deliver gas to the Western Region, including the King Abdullah Economic City, Rabigh Refining & Petrochemical Company (PetroRabigh) and certain other power plants.

Package 2 for the Central Region entails the installation of a 226 kilometre-long pipeline of 46 inches, on the East-West Qassim Gas pipeline 1.

Arkad won the engineering, procurement and construction (EPC) contract to build the pipeline, which is the main scope of the contract, in early 2016.

The contract is expected to be complete by December 2018.