Skikda helium to take off from lower base

28 October 2005
Construction of a 600 million-cubic-feet-a-year (cf/y) helium plant at the Skikda liquefaction complex is almost complete, with the first gas feed to begin in mid-November and the first helium to be produced by the end of the year. However, initial production will be restricted to just under 60 per cent of the plant's capacity due to limited feedstock supplies from the Skikda liquefied natural gas (LNG) plant, which was partly damaged in 2004 (MEED 23:1:04).

The helium plant, worth an estimated $80 million-100 million, will not reach full production capacity until at least 2009, following the rehabilitation of the Skikda LNG facility. LNG production at Skikda was halved following the destruction of three of the six trains in a series of explosions in January 2004. The three trains are to be replaced by a single 4.5 million-tonne-a-year mega-train, estimated to be worth $700 million, but an award for the rehabilitation has not yet been made.

A team of Japan's JGC Corporationand the US' Kellogg Brown & Root (KBR)is the only remaining bidder for the contract following the withdrawal in the spring of the only other shortlisted bidder, a consortium of Paris-based Technip and US-based Foster Wheeler. Negotiations with the client, state energy company Sonatrach, are not expected to be completed until the new year (MEED 8:7:05).

Germany's Lindeand Sonatrach in January 2003 signed a 51:49 joint venture agreement to form project company Helison to develop and own the new helium plant (MEED 31:1:03).Half of the helium will be marketed by Helison Marketing, a 50:50 JV between Linde and Sonatrach.The facility will also have nitrogen production capacity of 140 tonnes a day.

Existing Algerian helium production comes from a 600 million-cf/y facility at Arzew operated by Helios, a 51:49 JV of Sonatrach and Helap, a consortium of the US' Air Products & Chemicalsand France's Air Liquide. Helios supplies the gas to Helap in liquid form under a 25-year purchase agreement that meets 50 per cent of Europe's helium needs.

Bids are due by the end of December for an estimated $80 million engineering, procurement and construction (EPC) contract to develop a third 600 million-cf/y helium plant near Arzew (MEED 14:10:05).

Algeria is the world's second-largest producer of helium after the US and accounts for about 15 per cent of global production.

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