Petrofac, STEP ink deal to construct petrochemical complex in Algeria

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Petrofac has entered into a definitive agreement with STEP Polymers SPA, a subsidiary of Sonatrach, for the design and construction of a petrochemical complex in the Arzew Industrial Zone in Algeria. This contract was initially announced in May 2023.

Petrofac will be working on this US $1.5bn project in partnership with China Huanqiu Contracting & Engineering Corp (HQC), with Petrofac’s share valued at over US $1bn. The contract was officially signed at a ceremony in Algiers, attended by representatives from Petrofac, HQC, and STEP.

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Oil and gas industry in Algeria

Tareq Kawash, the Group Chief Executive of Petrofac, expressed his delight at being in Algiers with their partner and client to commemorate the official award of this groundbreaking project. He also highlighted how this contract expands Petrofac’s portfolio in the petrochemical sector and reinforces their 25-year track record of safely delivering significant energy infrastructure projects in Algeria while contributing to the development of local workforces.

The oil and gas industry in Algeria presents significant prospects for both local and international companies, with a particular emphasis on expanding the local service industry and meeting the growing demand for gas exports.

The country ranks tenth-largest proven natural gas reserves globally, and is also the world’s fourth-largest gas exporter, and has the world’s third-largest untapped shale gas resources.  It also ranks sixteenth in proven oil reserves and exports roughly sixty percent of its total production.  All the country’s proven oil reserves are onshore.  According to Sonatrach, about two-thirds of the Algerian territory remains underdeveloped or unexplored, with an estimated 100 undeveloped discoveries.

Given pressure from European Union customers to increase its supply of gas, Sonatrach and its international partners are intensifying oil and gas exploration.  Simultaneously, Algerian authorities are calling for locally manufactured products and services for small and medium-sized oil and gas service projects.

 

 

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