Saudi Aramco has launched a tender to build gas treatment units at Uthmaniyah, sources familiar with the matter said on Thursday, in a project expected to cost upwards of $500 million.

Top oil exporter Saudi Arabia is struggling to keep up with domestic demand for gas, used in a number of sectors such as petrochemicals that are key to diversifying the economy.

The aim of the project is to recover ethane but also propane and other natural gas liquids (NGL) from 1.4 billion standard cubic feet per day (scfd) of sales gas. Bidding is due to close by the end of May, one of the sources said.

The ethane recovery project will strip the residual ethane from the processed fuel gas stream and make it available as a high-value feedstock for the petrochemical industry instead of burning it with the fuel gas, said Sadad Al-Husseini, a former senior executive at Saudi Aramco.

The project would be completed in August 2019, two sources said. The sources said the project was estimated to cost anywhere between $500 million to as much as $1 billion.

Saudi Aramco does not comment on rumour or speculation, it said in an emailed response to Reuters.

Uthmaniyah is one of the operating areas of Ghawar, the world's largest onshore oilfield. The gas plant has a processing capacity of 2.5 billion scfd.

The oil giant is building a number of gas plants to meet rising domestic gas demand. It has said its Fadhili, Midyan, and Wasit gas plants will add more than 5 billion scfd of non-associated gas processing capacity. -Reuters