Delays occur in Adrar refinery

07 December 2001

Bidders for the contract to build the proposed Adrar refinery and develop hydrocarbons reserves in the Sbaa basin are still awaiting technical criteria for the project. Information had been scheduled to be sent out by the client, state energy company Sonatrach, by the end of November.

A senior official at one of the bidding companies says the delay comes as little surprise. 'This is the first tender of its kind involving both upstream and downstream developments, and its novelty could mean the tender terms are subject to some last-minute changes.' The closing date for commercial offers has already been put back to the end of February. If the client is to adhere to this deadline, bidders expect to receive the technical terms of reference by the end of the year at the latest (MEED 19:1:01).

Three groups have submitted technical offers for the refinery. They are China National Petroleum Company, with China National Oil & Gas Exploration & Development Corporation (CNODC); Cepsaof Spain, with TotalFinaElfof France; and the US' Marathon Oil Company. Several power station operators initially showed interest in the project, but were deterred from bidding by the refinery's remote location.

The new plant is to be built in the Sbaa basin, at least 1,000 kilometres south of the capital, where there are estimated reserves of 600 million barrels of oil and 6 trillion cubic feet of gas. In addition to building the refinery, the bidders have been invited to submit proposals for the development and exploitation of hydrocarbons fields and the establishment of industrial projects using fuel produced by the refinery.

The cost of transporting the refined product north to the coast for export is prohibitive. Instead the plant will supply Algeria's southern provinces, with possible sales to the country's Saharan neighbours. 'It's not going to be easy,' says one industry source. 'There is a limited market in a very large area.' However, he says bidders may be attracted by the basin's gas potential.

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