Abu Dhabi and ConocoPhillips have awarded a Dh1.1 billion ($300 million) construction contract for their Shah gas project to Al Jaber Group, Emirati newspaper al-Ittihad reported on Saturday.

Last month, local media reported the joint venture was planning to award around $10 billion of contracts in the first half of 2010 to develop the sour gas field.

The two parties would sign the final contract soon, al-Ittihad quoted a source as saying.

Privately owned Al Jaber Group will build the project's infrastructure, including its roads as well as units such as gas treatment plants, the newspaper reported.

State-run Abu Dhabi National Oil Company (Adnoc) has said it expected to see first production from the joint-venture by late 2013 or early 2014.

It is the first project the United Arab Emirates has undertaken to exploit a sour gas field. The field has a high content of potentially deadly sulphur dioxide, making it tougher to produce than conventional reserves.

The project would treat around 1 billion cubic feet of gas from Shah, and pump around 540 million cfd of processed gas into the UAE network.

The UAE holds the world's fifth largest gas reserves, but has failed to keep up with rising domestic demand.-Reuters