Algeria’s Biskra Refinery, which has an estimated budget of $2bn, has been put on hold by the national oil and gas company Sonatrach, according to industry sources.

“The low oil price environment means that things aren’t like they used to be,” said one source.

“This project is definitely going to go ahead one day – but right now nothing is happening due to funding problems. It is not known when the project will be revived.”

The front end engineering design (feed) for the project is complete.

The feed contract was awarded to Amec Foster Wheeler in February 2016. Since then, Amec Foster Wheeler has been acquired by Wood Group.

“The client has decided not to go ahead with the project right now so it can focus its efforts on Hassi Messaoud and the Tiaret refinery.”

Sonatrach has prequalified EPC contractors for the $2.5bn Hassi Messaoud Refinery and is currently preparing to issue the invitation to bid (ITB).

The Biskra, Hassi Messaoud and Tiaret refineries were all announced as part of a series of five planned refineries in 2013. The other two refineries are also on hold and have not seen feed contracts awarded.

Industry sources say that Sonatrach still expects to build all five refineries at some point though there is no timeframe for construction.

Algeria has seen a surge in oil and gas project activity over the last two years.

Between 1 July 2016 and 30 June 2017, it was the second-most active market in the MENA region in terms of EPC contracts awarded, according to data recorded by the regional projects tracker MEED Projects.

During this period, it awarded six contracts worth a total of $3.7bn.

Over the past 18 months, Algeria has also managed to reverse falling production and increase oil and gas output, bringing new fields online and getting better yield from mature fields.