Saudi Aramco has awarded a letter of intent to one contractor for work on the expansion of its Abu Ali gas plant, with the project likely to be worth around $2 billion.

Italy's Saipem is understood to have landed the deal.

The onshore contract is part of Aramco’s Berri offshore incremental programme and its workscope is thought to include the engineering, procurement and construction of a new onshore gas oil separation plant (GOSP) at the existing Abu Ali gas plant facility.

Multiple sources told Upstream that Aramco recently placed the letter of intent with the Italian player and suggested that a formal contract is likely to be signed within days.

Upstream had reported in April that Saipem was well placed for the gas plant project, which relates to the Saudi state-owned giant’s Berri expansion project.

In addition to Saipem, South Korean giant Hyundai Engineering & Construction and UK-listed Petrofac were also understood to be among the bidders, but ultimately lost out to the Italian contractor.

The new GOSP is expected to have a handling capacity of about 250,000 barrels per day of crude.

In addition, the project’s workscope is likely to include additional processing facilities at the Khursaniyah gas plant (KGP).

The new surface facilities envisaged at KGP are likely to process 40,000 bpd of condensate, one source said.

Canada’s SNC-Lavalin was awarded a key contract in 2017 by Aramco for engineering and project management services on the Berri incremental programme.

Dhahran-headquartered Saudi Aramco is spending heavily on its Marjan, Berri and Zuluf incremental programmes to boost oil and gas production from the mature offshore fields.

The three incremental programmes are together valued at more than $20 billion and involve multiple onshore as well as offshore packages that have been offered to EPC contractors.

While the award for the Berri gas plant is in the process of being finalised, Aramco is expected to award various onshore and offshore packages for the Marjan incremental development plan within days.

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Saudi Aramco hands out Abu Ali gas plant work