Sonatrach pushes ahead with major refinery schemes

21 October 2009

Projects were delayed in 2008 as subsidiary was reintegrated into state energy giant

Algerian state energy company Sonatrach has given the clearest indication to date that it plans to move ahead with two major schemes to boost the country’s refining capacity.

It has selected a total of 12 international engineering firms to enter into the final bid rounds on the two deals, which cover the design of a new refinery at Tiaret and the revamping of existing facilities at Algiers.

Sonatrach opened technical bids outlining engineering proposals for both deals on 19 October. It selected 12 firms to move ahead into the final commercial bid rounds for both contracts.

On the first contract, four companies will submit final bids. The deal covers a front end engineering and design (Feed) study for a new 450,000 barrel a day (b/d) export refinery at Tiaret on the central Algerian coast. The project is valued at $6bn.

The companies are Paris-based Technip, Chinese state refiner Sinopec, the US’ CB&I (Chicago Bridge & Iron) Lummus, and a consortium of Italy’s Saipem with Japan’s Chiyoda Corporation.

On the second contract, eight contractors will proceed to the final bidding round on the engineering, procurement, and construction deal to refurbish its existing 60,000 barrel-a-day Algiers refinery. This deal is valued at about $300m.

South Korea’s Hyundai Engineering & Construction, Samsung Engineering, and GS Engineering & Construction all passed through to the next bid round, as did the UK’s Petrofac, Saipem, Spain’s Tecnicas Reunidas, Technip, and Sinopec.

Attempts to move ahead with both schemes in 2008 were delayed as Sonatrach reclaimed control over state refiner Naftec, a subsidiary of the company that had previously been largely autonomous.

Sonatrach will enter into technical discussions with the firms on both deals before setting a final date for commercial bids.

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