Algeria to tender $14bn of new refineries

10 March 2013

Facilities will be built at Tiaret and Biskra

The Algerian government has announced plans to launch tenders for two major grassroots refinery projects with combined capacity of about 10 million tonnes a year (t/y).

The new refineries will both be built at inland locations, at Tiaret in the northwest and Biskra in the northeast. The planned facilities are part of a government programme to add five new refineries worth a total of $14bn.

According to a statement by Abdelkader Benchouia, vice-president for downstream activity at Algeria’s state-owned energy company Sonatrach, bid documents for the two plants will be drawn up “in the coming weeks”.

Soil studies and geological and engineering feasibility studies have been completed on the proposed site for the Tiaret facility, said Benchouia. The crude oil refinery will be built on a 300-hectare plot as part of a 1,400-hectare petrochemicals complex.

Both plants will produce a mixture of refined products, including propane, diesel, fuel oil and its derivatives, lubricants, naphtha and kerosene. Each will have crude processing capacity of about 5 million t/y.

The government plans to complete five new refineries by 2017. In addition to Tiaret and Biskra, refineries are planned at two more inland locations – Ghardaia and Hassi Messaoud – and a coastal site. Two of the remaining facilities are “under preparation”, said Benchouia.

The new refineries will address a growing shortfall in refined products. Algeria has the fourth-largest oil reserves in Africa, and exports some 1.5 million barrels a day of oil and liquids, but it is a net importer of refined products.

In 2012, imports of refined petroleum were estimated to be between 2.5 million and 3 million tonnes, in part due to an extended outage at Skikda, the country’s largest refinery. But a deficit is also expected in 2013.

A rehabilitation programme is also under way on Algeria’s existing refineries, to increase capacity from 27 million t/y to 30 million t/y.

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