Total and Sonatrach have signed an agreement to start the engineering studies for their Algerian petrochemical project to be built with an investment of $1.4bn in Azrew.
Total, Sonatrach plan to build a $1.4bn petrochemical project in Algeria. Photo: courtesy of supakitmod/Freedigitalphotos.net.
Total and Sonatrach have signed an agreement to start the engineering studies for their Algerian petrochemical project to be built with an investment of $1.4bn in Azrew.
The project is part of a comprehensive agreement signed by Total with the Algerian state-owned oil company in April 2017 to strengthen their existing partnership.
While Total will own 49% stake in the Arzew petrochemical project, Sonatrach will own the remaining 51% stake.
According to Total, the project will feature a propane dehydrogenation (PDH) unit and a polypropylene production unit with an annual output capacity of 550,000 tons.
Based on approval from relevant Algerian regulators, the partners intend to initiate the front-end engineering and design (FEED) this summer.
Total said that the petrochemical project will valorize propane, produced in large quantities regionally, by converting it into polypropylene, a plastic for which demand is going up.
The company further said that the new facility will mainly meet the local and Mediterranean demand of polypropylene. It will take up the responsibility for commercializing the rest of the polypropylene production in Europe.
Total chairman and CEO Patrick Pouyanné said: “This project in Algeria illustrates our petrochemical growth strategy which consists of expanding our activities from competitively advantaged feedstock, especially derived from gas, to take advantage of the growing global plastics demand.
“This polypropylene project complements our other projects announced recently in the United States, in the Middle-East and in Asia, which are primarily focused on polyethylene.”
Total, which has been operating in Algeria since 1952, had produced 15,000 barrels of oil equivalent per day (boe/d) in the country in 2017. All of the production had come from the Tin Fouyé Tabankort (TFT) gas and condensate field in which it holds a stake of 35%.
In March 2018, the company commenced production from the Timimoun gas field in southwestern Algeria where it holds a stake of 37.75%. Total is partnered by Sonatrach (51%) in the Timimoun Gas Field alongside Cepsa (11.25%).
In another development, Sonatrach entered into an agreement last week to acquire Esso Italiana’s Augusta refinery in Sicily, Italy along with certain midstream assets for an undisclosed price.