France’s Total says it could reduce its holding in the planned ethane cracker at Arzew in northwest Algeria, which it is developing in partnership with state-owned energy giant Sonatrach.
Total may need to lower its stake before the delayed facility moves from the planning stage to construction.
The two companies signed an agreement in December 2007 to build the plant under a 51:49 joint venture, with Total owning the majority share. However, the venture has made little progress since then, as the two companies disagree about ownership, the price of ethane feedstock and the financing of the cracker.
In July 2008, Algeria’s President Abdelaziz Bouteflika criticised foreign investors for failing to put the needs of Algeria first. Since then, his government has taken majority stakes in all new ventures.
“Nothing has been changed as of today, but it could change. It’s proven to be a little more difficult to move at the pace we’d like,” says Graeme Burnett, senior vice-president for the Middle East and Asia at Total Petrochemicals, referring to Total’s 51 per cent stake in the Arzew cracker.
Burnett declined to say how much of the venture Total will hold in the long term. The company may have to accept a minority stake if the project is to move ahead.
Total is waiting for Sonatrach to decide what to do about supplying feedstock to the cracker.
The plant is expected to produce more than 1 million tonnes a year of ethylene, which can then be used to produce a range of plastics and other goods.