Saipem, via its subsidiary ERSAI Caspian Contractor, has signed a new engineering and construction contract worth approximately $1.8bn for the Kashagan field project, located in the Kazakh waters of the Caspian Sea.

The contract with the North Caspian Operating Company (NCOC) will see Saipem build two 95km pipelines to link D island in the Caspian Sea to the Karabatan onshore plant in Kazakhstan.

Saipem will also provide engineering, welding materials, conversion and preparation for the vessels, as well as dredging, installation, burial and pre-commissioning services of the two pipelines.

"This is a very important contract, working for some of the most important oil companies in the world."

The company will use specialised subcontractors for certain elements of the work.

The 28in pipelines will have an offshore length of around 65km of the total 95km and Saipem expects to complete the construction work by the end of 2016.

Saipem CEO Umberto Vergine said: "This is a very important contract, working for some of the most important oil companies in the world in a key region for Saipem.

"It also represents another relevant contribution to our backlog in this low price market environment."

The Kashagan field is being developed by Shell, Eni, Exxon Mobil, Total, China National Petroleum, Inpex and Kazakh state-run oil company KazMunaiGas.

Kashagan, which was discovered in July 2000, will feature a total of 40 production wells, of which 20 were operational as of 2013.

Initial production was achieved in September 2013 with 60,000bpd. It is expected to produce 1.5 million bpd by 2021.

NCOC is the operator of the field.