Sonatrach and Total have signed two agreements as part of a partnership announced in 2017 to strengthen cooperation in natural gas and petrochemicals in Algeria.
Sonatrach, Total and Alnaft (National Agency for the Valorization of Hydrocarbon Resources) have signed a concession contract to jointly develop the Erg Issouane gas field located on the TFT Sud permit.
Total is a long-standing partner of the TFT Sud permit, located south of the Tin Fouyé Tabankort (TFT) field.
Sonatrach with a 51% stake and Total with 49% interest will develop the reserves of Erg Issouane located on the TFT Sud permit estimated at more than 100 million barrels of oil equivalent (boe).
The development, representing an investment of around $400m, will be tied back to the existing TFT gas treatment unit by a 22km gas pipeline and first gas is expected in 2021.
The partners have also signed a gas marketing agreement.
The concession contract will become effective once it is approved by the Algerian authorities.
Sonatrach and Total have signed a shareholder agreement to create a joint venture, Sonatrach Total Entreprise Polymères (STEP), which will carry out a joint petrochemical project in Arzew, western Algeria.
The project includes a propane dehydrogenation (PDH) unit and a polypropylene production unit with an output capacity of 550,000 tons per year.
The two partners (Sonatrach 51% and Total 49%) plan to start the front-end engineering and design (FEED) in November 2018.
The project will facilitate valorization of propane, produced in large quantities locally, by transforming it into polypropylene, a plastic for which there is strong demand.
Total chairman and CEO Patrick Pouyanné said: “Today’s agreements mark a new milestone in the development of the strategic partnership between Sonatrach and Total to continue developing the country’s gas reserves by providing the best of our technological expertise.”
Total began exploration and production activities in Algeria in 1952. In 2017, Total’s production in Algeria averaged 15,000 barrels of oil equivalent per day (boe/d), all from the TFT gas and condensate field in which the group currently holds a 35% interest.
Total also markets lubricants and bitumen in the North African country.