State-owned oil company Sonatrach and French oil major Total are preparing to launch a new multibillion-dollar petrochemical project in Algeria.

 The facility will be propane dehydrogenation polypropylene (PHD/PP) plant and will be built on a greenfield site, according to industry sources, who expect the project to be formally announced before the end of 2018.

 “It’s not certain whether Sonatrach or Total will be leading this project, but the project is definitely going ahead,” said one source.

“The project has a lot of moment of momentum and is going to be a large-scale development. Definitely several billion dollars, rather than hundreds of millions.”

The project is going to be based on a feasibility study for a “world-scale petrochemicals complex” that Sonatrach commissioned Total to undertake in December 2016.

 Propane dehydrogenation (PDH) is a process that is used to produce polymer-grade propylene (PP) from propane without using a steam cracker or fluid catalytic cracking unit.

A spoksperson for Total confirmed that the company was commissioned to carry out a petrochemicals feasibility study for Sonatrach in 2016.

When asked about the planned PHD/PP plant the spokesperson declined to comment.

Total has had upstream operations in Algeria since 1952. It also makes lubricants and asphalt in the country.

In December last year, Sonatrach’s CEO Ould Kaddour announced plans to work more closely with Total on offshore, petrochemical, solar energy and shale exploration projects.

Talking about Total in December Kaddour said: “We definitely need its expertise and knowledge”.

 Sonatrach is currently working on a strategic plan to reach mid-term and long-term goals, called SH2030.

 It is thought that the planned petrochemical facility with Total will be a key element of the downstream strategy laid out in SH2030.

The French oil major’s relationship with Sonatrach deteriorated in the mid-200os after the state-owned oil company changed profit-sharing terms on oil and gas contracts against Total’s wishes.

 The dispute was settled in April 2017 when the two entities agreed a new contractual framework for the Timimoun project, as well as continued joint operations for the Tin Fouye Tebenkort (TFT) gas field.