Petrofac has started construction work at the Ain Tsila development project in Algeria, according to industry sources.

The UK-based company won the contract for the field development project in March.

The gas field development contract, worth about $1bn, was awarded by Groupment Isarene, the joint operating group set up by Sonatrach, Petroceltic and Enel.

Located about 1,100 kilometres southeast of Algiers, the Ain Tsila field will produce gas, liquefied petroleum gas (LPG) and condensate for the local Algerian market and for export.

Under the terms of the 42-month lump-sum engineering, procurement and construction (EPC) contract, the scope of work includes commissioning, start-up and performance testing.

Other bidders for the contract were:

• Dodsal (UAE) /  Maire Technimont (Italy)
• Tecnicas Reunidas (Spain) / Bonatti (Italy)

The contract was awarded after long delays connected to the replacement of the project manager and adjustments to the scope of the project.

Technical bids for the EPC contract to develop the field were submitted in November 2017.

Italian energy company Enel has an 18.375 per cent stake in the asset, with Ireland-based Petroceltic holding 38.25 per cent and state-owned Sonatrach holding a 43.375 per cent stake.

According to specifications from the front-end engineering and design (feed) work carried out by US company Chicago Bridge & Iron (CBI), the surface facilities will process up to 420 million cubic feet a day (cf/d) of wet gas.

The facilities will transport streams of dry gas, LPG and condensate to existing tie-in points in the Algerian national pipeline grid.

The Ain Tsila gas field is located in the Illizi basin, within the Isarene permit in Blocks 228 and 229a.

Enel acquired its stake in the asset from Petroceltic in 2011. A gas sales agreement was signed with Sonatrach in 2014 and the design work was started in October 2014. The total acreage covered under the licence is 3,050km.

Petrofac’s other EPC activities in Algeria include Sonatrach’s Tinrhert field development project, along with the Alrar and Reggane projects that commenced production last year.