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Aberdeen-based oil firm Dana Petroleum has awarded a $300m (£187m) engineering contract for its major development east of Shetland.

Dana said Luxembourg-registered Subsea 7 would provide services in support of its £1bn Western Isles project.

The contract includes constructing and installing two pipeline bundles and a 6.8 mile gas export pipeline.

Last month, Dana was given the green light to develop nine wells in the Harris and Barra fields.

They are estimated to contain recoverable oil reserves of more than 45 million barrels.

Daily production from the fields - which are located about 100 miles east of Shetland - is expected to start in 2015.

Subsea 7 said engineering and project management work would start immediately from its Aberdeen office, with offshore activities scheduled to commence in 2014.

Subsea 7's UK and Canada vice president, Steph McNeill, said: "The award of this prestigious contract from Dana is an endorsement of our unique bundle technology.

"We are grateful to Dana for choosing us to provide them with a cost effective solution and look forward to helping them deliver this strategically important development".