Seven companies have been invited to workshops on 18-25 February for the $2.5bn upstream section of the project, which involves exploration of the Gassi Touil basin in the southeast. Tenders are also understood to be imminent on the $4bn contract to build the LNG export terminal.

Firms invited include Canada's SNC Lavalin; Japan's JGC Corporation; Paris-based Technip; Bechtel of the US; UAE-based Petrofac International; Stone & Webster, part of the US' Shaw Group; and Saipem, a subsidiary of Italy's Eni.

After the workshops, firms will be invited to submit a price and schedule for front-end engineering and design (FEED) studies.

The FEED will be carried out on a competitive basis, with more than one company to be selected to prepare studies in the summer. The contractor that wins the FEED competition will carry out the engineering, procurement and construction phase of the upstream development.

Tenders are expected to be issued by the end of February for the main contract on the downstream element of the scheme. France's Technip and Saipem, a subsidiary of Italy's Eni, are expected to bid for the contract, which calls for the construction of a 4-million-tonne-a-year LNG terminal at Arzew in the northeast.

A decision is yet to be taken on whether to carry out the construction phase on a lump-sum turnkey or cost-reimbursible basis. It is likely that the reimbursible model will be adopted. In July 2007, Sonatrach awarded the $2.9bn contract for the country's other main LNG project, at Skikda, on a cost-reimbursible basis.

Sonatrach is carrying out initial works on the integrated project using the same subcontractors and service firms as its previous Spanish partners, Repsol and Gas Natural. Sonatrach and its former partners are pursuing compensation via arbitration.