China's Shandong Electric Power Construction Corp (Sepco) has signed a contract to build a gas compressor station as part of the expansion of Saudi Arabia's main gas pipeline, according to industry sources.

The world's top oil exporter is pressing ahead with gas-related projects to meet rising domestic demand and conserve oil for export and refining.

Overseen by state oil company Saudi Aramco, the project, known as Master Gas System 2 (MGS 2), will raise the system's capacity to 12.5 billion cubic feet of gas a day (cfd) by 2018 from 8.4 billion cfd currently.

There was no clear value for the contract but sources have estimated it at around $700 million to $800 million.

Saudi Aramco did not respond to an e-mailed request for comment. Sepco was not available for immediate comment.

Sepco is already executing the first phase of the expansion of the MGS, installing booster gas compressor stations due to be complete by the end of 2016 that will help raise capacity to 9.6 billion cfd.

The MGS was built in the mid-1970s to gather and process associated gas from oil wells for use by domestic industries.  - Reuters