Saudi Aramco has contracted a Chinese group for a project to help expand the capacity of the main gas pipeline across Saudi Arabia, which dates back to the 1970s, aiming to improve energy supply to industries in the west of the country.

Under the contract, the first phase of an expansion of the master gas system (MGS), China's Shandong Electric Power Construction Corp (Sepco) will install two booster gas compressor stations, Aramco's weekly magazine Arabian Sun reported on Wednesday.

MGS was built in the mid-1970s to gather and process associated gas from oil wells and use it for domestic industries. The project will help deliver gas to the western region, including the King Abdullah Economic City, PetroRabigh and an independent power plant.

Aramco did not give the contract's value. Two industry sources estimated it at less than $1 billion to around $1.3 billion.

Once Sepco's work is complete by the end of 2016, the capacity of MGS will rise to 9.6 billion cu ft of gas a day (cfd) from 8.4 billion. Aramco said capacity will further increase to 12.5 billion cfd by 2018 under a second phase, for which engineering design work is due to be complete next year. - Reuters