Sonatrach suspends talks

09 November 2007

State energy company Sonatrach has suspended joint venture negotiations for the second phase of its petrochemicals masterplan in favourof carrying out feasibility studies, according to seniorindustry sources.

Stone & Webster, part of the Shaw Group and UOP, all of the US, are understood to be among the technology providers approached to study the feasibility of up to three new facilities: a fuel oil cracker at Skikda and a naphtha cracker and propane dehydrogenation (PDH) complex at Arzew. The fuel oil cracker is understood to be most likely to go ahead.

China's CNPC was understood to be in negotiations to form a partnership to develop the fuel oil cracking facility,but the talks are believed to have been suspended. Bidders for the other two plants include Saudi Basic Industries Corporation and Japan'sItochu Corporation.

'There is no sign of a partner for the project,' says a senior industry source. 'But technology providers havebeen approached.'

'If any of the three schemes goes ahead, it will be the fuel oil cracker,' says another senior source. 'The PDH plant might have legs, but the naphtha cracker makes very little sense.'

Algiers will spend more than $10,000 million in 2008 on developing its petrochemicals industry, said Energy Minister Chakib Khelil in remarks reported in the local press on4 November.

In July, France's Total was awarded the contract to build an ethane cracker, and the local/international Almet consortium won the contract to build a methanol plant, both at Arzew (MEED 20:7:07).

Sonatrach was unavailable to comment on the change in strategy for the country's petrochemicals masterplan, which was launched in 2005.

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